Dalio Sounds Alarm on Global Instability, Bitcoin Rises as Safe-Haven Asset

Ray Dalio, the founder of Bridgewater Associates, is raising the alarm on an impending global economic collapse, warning that the world is facing a systemic breakdown that goes far beyond a potential recession. Speaking in an interview with CNBC, Dalio pointed to a deeper fragility in both the political and economic systems that could lead to unprecedented disruptions.

While Dalio paints a bleak picture for the future, Bitcoin (BTC) has shown remarkable resilience amid the ongoing turbulence. The cryptocurrency has managed to break a three-month downward trend, reaching towards $85,000, suggesting that it could be gaining traction as a potential safe-haven asset in a world of growing uncertainty.

The uncertainty surrounding global markets is exacerbated by the inconsistent signals coming from the U.S. government, particularly concerning President Trump’s fluctuating tariff policies. The mixed messages have fueled market volatility, especially in the past couple of weeks, as traders and investors struggle to make sense of the shifting policies.

Dalio’s primary concern lies in the ballooning U.S. debt and federal deficit, which he believes pose a serious threat to the long-term stability of the economy. He urges Congress to take immediate action to reduce the federal deficit to 3% of GDP, warning that failure to do so could lead to severe market dislocations. Dalio stresses that the growing disparity between the U.S. government’s debt and investor demand could spark a financial crisis.

The bond market is already reflecting these concerns, with U.S. Treasury yields rising sharply. The 10-year yield is just under 4.5%, and the 30-year yield is approaching 5%, which is unsettling markets and could prompt the Federal Reserve to intervene.

Tariff uncertainties are also contributing to the broader instability, as evidenced by the recent decline in the U.S. dollar. The DXY index has dropped below 100 for the first time in years, signaling potential capital flight from the U.S. Dalio has called for a comprehensive trade deal with China and a currency adjustment that would strengthen the yuan, which he believes would help stabilize the system.

Dalio compares the current global risks to previous historic events, such as the U.S. exit from the gold standard in 1971 and the 2008 financial crisis, both of which led to fundamental changes in the global economic landscape. He warns that we are at a similar inflection point, where the current economic and political challenges could reshape the financial system once again.