Dalio Warns of Systemic Breakdown Amid Economic Turmoil, But Bitcoin Holds Firm
Ray Dalio, the founder of Bridgewater Associates, is raising alarms about a looming global systemic crisis, not just a potential recession. In a recent interview with CNBC, Dalio expressed concerns about a breakdown in the global economic and political order, highlighting structural fragility rather than mere market volatility.
Despite the widespread turmoil, Bitcoin (BTC) is proving to be resilient. After a three-month downtrend, the digital asset has broken its losing streak, approaching the $85,000 mark. This surge suggests that Bitcoin might be positioning itself as a potential alternative safe haven during these uncertain times.
Markets continue to be shaken by mixed signals from the White House regarding tariffs, which is contributing to a sense of instability across global financial systems. Over the past two weeks, as President Trump’s tariff policies take effect, market volatility has intensified.
Dalio is particularly concerned about the rising U.S. debt and deficit. He emphasizes the need for Congress to bring the federal deficit down to 3% of GDP. He warns that the growing imbalance between debt supply and investor demand could lead to major economic disruptions, as noted in his CNBC interview.
This concern is already reflected in the bond market, where U.S. Treasury yields are climbing. The 10-year yield is hovering just under 4.5%, while the 30-year yield is below 5%. These rising yields are rattling investors, with some speculating that the Federal Reserve may need to intervene to stabilize the situation.
The uncertainty surrounding tariffs is also feeding broader macroeconomic instability. The U.S. dollar, as measured by the DXY index, has fallen below 100 for the first time in years, signaling a potential capital outflow. Dalio advocates for a comprehensive trade agreement with China and a currency adjustment to strengthen the yuan, aiming to stabilize the global financial system, which is showing signs of fragility.
Dalio draws comparisons between the current risks and historical turning points, such as the U.S. exit from the gold standard in 1971 and the 2008 global financial crisis. Both of these events marked significant shifts in the global financial landscape, and Dalio warns that we may be on the verge of another such inflection point.
