Dalio Warns of Global Systemic Breakdown, Bitcoin Remains Steady Amid Economic Uncertainty
Ray Dalio, the founder of Bridgewater Associates, has raised alarms about a looming systemic breakdown in the global economy. In a recent interview with CNBC, Dalio warned that the world faces deeper risks than a typical recession, pointing to structural weaknesses in both the political and economic systems that could result in major upheaval.
While Dalio’s predictions have been dire, Bitcoin (BTC) has shown remarkable resilience in recent weeks. The digital currency, which had been in a downward trend for the past three months, has made a strong recovery, recently pushing past $84,000 and showing signs of becoming a potential alternative to traditional safe-haven assets.
Global markets have been rocked by rising volatility, fueled by ongoing uncertainty surrounding U.S. tariff policies. President Trump’s inconsistent approach to tariffs, including his reversal of some earlier decisions, has left investors and traders uncertain, further amplifying market fluctuations.
Dalio’s primary concern remains the unsustainable trajectory of U.S. debt and deficit, with the economist urging Congress to take action to reduce the federal deficit to 3% of GDP. According to Dalio, the imbalance between the growing supply of debt and the lack of investor demand could trigger serious economic dislocations that may destabilize the global system.
This fear is evident in the bond market, where U.S. Treasury yields have surged. The 10-year yield is nearing 4.5%, while the 30-year yield is just under 5%, contributing to growing market unease. These rising yields could force the Federal Reserve to intervene in order to prevent a further economic downturn.
In addition to the deficit issue, Dalio warned that the ongoing trade war and tariff uncertainty are exacerbating the macroeconomic instability. The U.S. dollar, as measured by the DXY index, has fallen below 100 for the first time in several years, a signal that capital may be flowing out of the U.S. Dalio has called for a more comprehensive trade agreement with China and a potential adjustment to the global currency system, suggesting that strengthening the yuan could be part of the solution to restoring stability.
Dalio’s concerns are rooted in a historical context, as he compares the current situation to past economic turning points, such as the U.S. departure from the gold standard in 1971 and the 2008 global financial crisis. Both events reshaped the financial system, and Dalio believes we may be on the cusp of another significant shift.
