Ray Dalio has once again voiced his concern over a looming upheaval across monetary, political, and geopolitical systems—an event he describes as “a classic breakdown of the major monetary, political, and geopolitical orders”—renewing the debate over whether Bitcoin might offer a safe harbor as these stresses intensify. Sharing his views via X, Dalio warns that the world may be witnessing a once-in-a-lifetime shift, one that goes far beyond President Trump’s widely publicized tariff announcements.
The Fiat System Is Breaking Down
According to Dalio, these tariffs grab the headlines but do not sufficiently illuminate the core problems, among them what he views as runaway debt and an unsustainable imbalance between debtor-borrowers and lender-creditors. He describes the existing global arrangement, particularly the US reliance on China for goods and China’s buildup of US debt, as a legacy of the now-fragmenting “old monetary/economic order.”
In Dalio’s own words: “Don’t get me wrong, while these tariff announcements are very important developments…most people are losing sight of the underlying circumstances that got [Trump] elected president and brought these tariffs about.” He believes that the spectacle of tariffs, albeit economically consequential, is overshadowing deeper systemic pressures. He sees the US and China locking horns in a battle for economic and technological leadership—a rivalry that extends well beyond mere trade disputes.
“The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders,” Dalio writes. “This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place.”
He traces these unsustainable conditions to factors such as “too much existing debt,” economies “supported by this unsustainably large debt,” and the mismatch between countries like China—which is “hooked on selling their goods” to sustain its own growth—and the United States, which in his assessment is “hooked on debt to finance [its] excesses.”
This entanglement, Dalio argues, cannot endure in a climate of eroding trust and rising deglobalization. His critique extends into the political sphere, where he observes “huge gaps in people’s education levels, opportunity levels, productivity levels, income and wealth levels, and values,” leading to polarized political struggles.
Looking outward, he sees the once-dominant US-led world order drifting into what he deems a unilateral, “power-rules” arrangement. “We are now seeing that manifest in the US led trade-war, geopolitical war, technology war, and, in some cases, military wars,” Dalio explains, expressing concern that disruptions in capital markets, domestic politics, and even climate policy are interlinked in ways that could escalate each problem in turn.
Conspicuously absent from Dalio’s latest remarks is any direct discussion of Bitcoin. Yet he has shown a measured interest in BTC in previous commentary. In a 2021 essay, “What I Really Think of Bitcoin,” he declared the digital asset to be “one hell of an invention” and suggested that in a climate of runaway debt and rampant money creation, Bitcoin might attract attention as a store of wealth, much like gold.
He nonetheless maintained a note of caution, writing that its volatility, competition from other digital assets, and the possibility of government intervention could create hurdles. “I am not a Bitcoin/cryptocurrency expert,” Dalio stressed at the time, “so these are just my own personal thoughts.”
Implications For Bitcoin
Bill Barhydt, CEO and founder of Abra Global, also took to X to unpack the ramifications of the trade conflicts and debt environment, asserting that “China is calling Trump’s bluff and continues to sell US Treasuries.”
In his words, “the global race to the ‘fiat currency bottom’ continues with China and Europe pulling ahead,” leaving Europe in a desperate bid to “preserve access to the US” Barhydt contends that heavy tariffs on China could force a collapse of the yuan, which he says would then spark “a global flight to US Treasuries via Fed-led QE,” lowering interest rates in the near term.
From his vantage point, American assets—including BTC and crypto—would likely spike in value, while Chinese markets would feel the strain. “My thesis on higher Bitcoin/crypto and tech stock prices by end of Spring remain intact,” Barhydt predicts, adding: “BTC dominance may approach 70% before reversing due to L2s sucking strength out of Ethereum.”
His remarks also carry a geopolitical warning. “Under the above scenario China would likely begin its full takeover of Taiwan unless the US negotiates a grand trade deal,” Barhydt writes, expressing hope that such a major escalation could be avoided.
He envisions the potential for cheaper capital via quantitative easing, a policy move he anticipates could drive US inflation higher, though still within a range he finds manageable. He remains bullish long-term on US growth under “Trump+AI+robotics+trade deals,” cautioning that “no cure will be pain free.”
Sina, founder of 21st Capital, agrees with the argument that Bitcoin could flourish as currencies come under pressure and capital seeks safer havens. “China beginning currency devaluation is more than just an economic signal—it’s a trigger,” he explains. “Historically, when the yuan weakens, capital doesn’t stay put. It escapes. Some of it flows into gold, some into foreign assets—and a meaningful slice finds its way into Bitcoin.”
He connects currency devaluation, intensifying trade disputes, and eroding trust in legacy financial systems to create what he views as a perfect storm for neutral, borderless assets. “Bitcoin isn’t just a hedge anymore,” he insists. “It’s becoming a necessity in a world looking for stability outside the control of any one nation.”
At press time, BTC traded at $79,497.
