Billionaire investor Ray Dalio is raising concerns about the growing U.S. debt, warning it could pose a bigger threat to the U.S. dollar’s global dominance than deregulation. In a recent interview with the Financial Times, the Bridgewater Associates founder pointed to unsustainable fiscal policies as a key driver of eroding trust in fiat currencies.
Dalio believes that this trend is pushing both institutional and individual investors toward alternatives like gold and digital assets, particularly bitcoin. With a fixed supply of 21 million coins, bitcoin is seen by many as a hedge against inflation and excessive money printing.
Crypto and Gold Gaining Ground as “Hard Currencies”
As the U.S. and other reserve-currency nations continue to run up massive debts, Dalio says investors are searching for safer stores of value. He noted that during previous debt crises—such as those in the 1930s–40s and 1970s–80s—there was a similar shift toward gold. Today, that movement is expanding to include cryptocurrencies, which he describes as emerging “hard currencies.”
Dalio’s comments come at a time when inflation remains elevated and political polarization is rising, both of which could accelerate the global shift away from traditional monetary systems. He emphasized that bitcoin, with its limited supply and decentralized structure, offers unique advantages in this uncertain environment.
Stablecoins Still Carry Fiscal Risk
While Dalio downplayed the systemic risks posed by stablecoins, he did issue a caution: since most stablecoins are backed by U.S. Treasurys, their stability is still tied to America’s fiscal health. If the debt situation worsens or trust in Treasurys declines, even these digital dollar substitutes could be impacted.
Dalio framed today’s economic climate as part of a “late-stage debt cycle,” suggesting that we may be approaching a turning point in the global financial system. He warned that ongoing fiscal excess, high inflation, and rising populism could all contribute to a major shift in the monetary order—potentially accelerating the adoption of digital assets and alternative currencies.
