Crypto To Overtake The Dollar? Ray Dalio Flags End Of Debt Cycle

Crypto is located at the center of Ray Dalio’s new message. On September 3, 2025, the founder of Bridgewater Associates published a refutation point by point to what defined the “incorrect characterizations” of the Financial Times, releasing the complete questions and answers that he says he has provided to the document. The exchange reaffirms its “Big Debt Cycle” framework and claims that the increase in US debt charges, the risks for the independence of the Federal Reserve and the growing geopolitical fractures are eroding the role of the dollar as a wealth shop – conditions that according to him is increasing gold and encryption.

Because Crypto is “an attractive alternative”

Dalio frames the American fiscal position as a late cycle and dangerously self-financing. “The great excesses that are now foreseen due to the new budget probably cause a cardiac attack induced by the debt in the future relatively close to three years, give or take a year or two,” he wrote. It has quantified the short -term compression in terms of net, citing “about $ 1 trillion per year of interest” and “about $ 9 trillions needed to roll the debt”, together with about “$ 7 trillions” in expenditure compared to “$ 5 trillion” in revenue, required “a further $ 2 trilion in debt” that expansion of the offer, supported, Question when investors wonder if the bonds “are good wealth stores”.

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The fulcrum, in Dalio’s story, is now the Federal Reserve. If political pressure undermines the independence of the central bank, he warned: “We will see an unhealthy decline in the value of money”. If a “politically weakened” Fed “allowed the inflation of” hot runs “, the consequence would be that” the bonds and the dollar [go] Down in value “and, if not resolved, becoming” an ineffective shop of wealth and the disappearance of the monetary order as we know it “. He connected this to a wider model of late cycle: foreign owners” reduce their participations in US ties and increase their participations in gold due to geopolitical concerns “, which called” classically symptomatic “of the final game.

Dalio connected the macro and political threads to a more interventionist policy background, referring to actions “to take control of what companies do” and comparing the current phase to the period 1928-1938. He did not pin the dynamics on a single administration-“This situation has been underway for a long time under the presidents of both sides”, but said that post-2008 policies and in particular the post-2020 policies accelerated it. “The interaction of these five forces will lead to large and unimaginable changes in the next 5 years”, he added, listing the debt, internal policy, geopolitics, deeds of nature and technology (with the most important) such as drivers.

Within that late cycle scheme, Dalio placed crypto exactly in the “hard currency” bucket. “Crypto is now an alternative currency that has its limited offer,” he wrote. “If the offer of money in dollars increases and/or the question for it falls, this would probably make an attractive alternative currency encrypted.” He has linked the recent “Gold increases and cryptocurrency prices” to the “bad debt situations of currency governments” and reiterated his long attention on “wealth shops”.

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If the cryptocurrency could “significantly replace the dollar”, underlined the mechanics on the labels, observing that “most of the Fiat currencies, in particular those with great debts, will have problems to be effective wealth shops and will go to value compared to hard currencies”, a model he said echoed at the episodes of 1930-1940 and 1970-1980.

Dalio has faced the risk of Stablecoin encryption in that context, separating the prices of the prices of the activities of systemic fragility: “I don’t think so”, he said when he was asked if the exposure of the Stablecoins treasure is a systemic risk, adding that “a decrease in the real purchasing power of the Testers” is the real risk-immersed “if they are well regulated”. He also rejected the idea that deregulation alone threatens the conf well of the reserve of the dollar: “No”, he said, indicating again the dynamics of debt as primary vulnerability.

Dalio’s latest observations adapt within a ten -year evolution of his public position on Bitcoin and Crypto rather than an inversion of the whiplash. At the beginning, he underlined gold as the superior “wealth shop” and warned that if the bitcoin had ever been too successful, governments could limit it, fearing enthusiasm with the regulatory risk.

In 2020 to 2021 he began to call Bitcoin “an invention hell”, he recognized a small amount and increasingly framed as a portfolio diversifier that rhymes with digital gold, while underlining his volatility and his political sensitivity. With his latest observations, Dalio puts the entire cryptocurrency market within the monetary hierarchy he uses to analyze the dynamics of the late cycle.

At the time of the press, the market capitalization of the total cryptocurrencies was $ 3.79 trillion.

First floor image created with Dall.e, graphic designer by tradingview.com