{"id":93490,"date":"2025-09-03T15:00:09","date_gmt":"2025-09-03T15:00:09","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=93490"},"modified":"2025-09-03T15:00:09","modified_gmt":"2025-09-03T15:00:09","slug":"crypto-to-overtake-the-dollar-ray-dalio-flags-end-of-debt-cycle","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=93490","title":{"rendered":"Crypto To Overtake The Dollar? Ray Dalio Flags End Of Debt Cycle"},"content":{"rendered":"

Crypto sits at the heart of Ray Dalio\u2019s new message. On September 3, 2025, the Bridgewater Associates founder published<\/a> a point-by-point rebuttal to what he called the Financial Times\u2019 \u201cmischaracterizations,\u201d releasing the full written Q&A he says he provided to the paper. The exchange restates his \u201cBig Debt Cycle\u201d framework and argues that rising US debt burdens, risks to Federal Reserve independence, and mounting geopolitical fractures are eroding the dollar\u2019s role as a store of wealth\u2014conditions that he says are boosting gold and crypto.<\/p>\n

Why Crypto Is An \u201cAn Attractive Alternative\u201d<\/h2>\n

Dalio frames the US fiscal position as late-cycle and dangerously self-reinforcing. \u201cThe great excesses that are now projected as a result of the new budget will likely cause a debt-induced heart-attack in the relatively near future\u2014I\u2019d say three years, give or take a year or two,\u201d he wrote. He quantified the near-term squeeze in stark terms, citing \u201cabout $1 trillion a year in interest\u201d and \u201cabout $9 trillion needed to roll over the debt,\u201d alongside roughly \u201c$7 trillion\u201d in spending versus \u201c$5 trillion\u201d in revenues, requiring \u201can additional roughly $2 trillion in debt.\u201d That expanding supply, he argued, collides with weakening demand when investors question whether bonds \u201care good storeholds of wealth.\u201d<\/p>\n

The fulcrum, in Dalio\u2019s telling, is now the Federal Reserve. If political pressure undermines the central bank\u2019s independence<\/a>, he warned, \u201cwe will see an unhealthy decline in the value of money.\u201d Should a \u201cpolitically weakened Fed\u201d allow inflation to \u201crun hot,\u201d the consequence would be that \u201cbonds and the dollar [go] down in value\u201d and, if not remedied, becoming \u201can ineffective storehold of wealth and the breaking down of the monetary order as we know it.\u201d He linked this to a broader late-cycle pattern: foreign holders \u201creducing their holdings of US bonds and increasing their holdings of gold due to geopolitical worries,\u201d which he called \u201cclassically symptomatic\u201d of the endgame.<\/p>\n

Dalio connected the macro and political strands to a more interventionist policy backdrop, referencing actions \u201cto take control of what businesses do\u201d and likening the current phase to the 1928\u20131938 period. He did not pin the dynamic on a single administration\u2014\u201cthis situation has been going on for a long time under presidents from both parties\u201d\u2014but said post-2008<\/a> and especially post-2020 policies accelerated it. \u201cThe interaction of these five forces will lead to huge and unimaginable changes over the next 5 years,\u201d he added, listing debt, domestic politics, geopolitics, acts of nature, and technology (with AI most important) as the drivers.<\/p>\n

Within that late-cycle schema, Dalio placed crypto squarely in the \u201chard currency\u201d bucket. \u201cCrypto is now an alternative currency that has its supply limited,\u201d he wrote. \u201cIf the supply of dollar money rises and\/or the demand for it falls, that would likely make crypto an attractive alternative currency.\u201d He tied the recent \u201crises in gold and cryptocurrency prices\u201d to \u201creserve currency governments\u2019 bad debt situations,\u201d and reiterated his long-running focus on \u201cstoreholds of wealth.\u201d<\/p>\n

On whether crypto could \u201cmeaningfully replace the dollar,\u201d he emphasized mechanics over labels, noting that \u201cmost fiat currencies, especially those with large debts, will have problems being effective storeholds of wealth and will go down in value relative to hard currencies,\u201d a pattern he said echoed the 1930\u20131940 and 1970\u20131980 episodes.<\/p>\n

Dalio addressed crypto stablecoin risk<\/a> in that context, separating asset price drawdowns from systemic fragility: \u201cI don\u2019t think so,\u201d he said when asked if stablecoins\u2019 Treasury exposure is a systemic risk, adding that \u201ca fall in the real purchasing power of Treasuries\u201d is the real hazard\u2014mitigated \u201cif they are well-regulated.\u201d He also rejected the notion that deregulation alone threatens the dollar\u2019s reserve status: \u201cNo,\u201d he said, pointing again to debt dynamics as the primary vulnerability.<\/p>\n

Dalio\u2019s latest remarks fit within a decade-long evolution of his public stance<\/a> on Bitcoin and crypto rather than a whiplash reversal. Early on, he emphasized gold as the superior \u201cstorehold of wealth\u201d and warned that if Bitcoin ever became too successful, governments might restrict it\u2014tempering enthusiasm with regulatory risk.<\/p>\n

By 2020\u20132021 he began calling Bitcoin \u201cone hell of an invention,\u201d acknowledged owning a small amount, and increasingly framed it as a portfolio diversifier that rhymes with digital gold, while still stressing its volatility and policy sensitivities. With his latest remarks, Dalio puts the entire crypto market inside the monetary hierarchy he uses to analyze late-cycle dynamics.<\/p>\n

At press time, the total crypto market cap stood at $3.79 trillion.<\/p>","protected":false},"excerpt":{"rendered":"

Crypto sits at the heart of Ray Dalio\u2019s new message. On September 3, 2025, the Bridgewater Associates founder published a point-by-point rebuttal to what he called the Financial Times\u2019 \u201cmischaracterizations,\u201d releasing the full written Q&A he says he provided to the paper. The exchange restates his \u201cBig Debt Cycle\u201d framework and argues that rising US […]<\/p>\n","protected":false},"author":0,"featured_media":93491,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-93490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/93490"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=93490"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/93490\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/93491"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=93490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=93490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=93490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}