Billionaire hedge fund manager and Bridgewater Associates founder Ray Dalio has issued a stark warning about the future of the U.S. dollar as the world's primary reserve currency, citing unsustainable national debt and geopolitical tensions. In interviews with the Financial Times and CNBC at the World Economic Forum in Davos, Dalio argued that the global monetary system is "breaking down."
Dalio directly linked the stress on the U.S. dollar to rising demand for alternative assets like gold and cryptocurrencies. He stated, "I do see the dollar and the other reserve currency governments’ bad debt situations as threatening to their appeals as reserve currencies and storeholds of wealth," adding that this dynamic is "what has been pushing gold and cryptocurrency prices higher." The U.S. national debt, which exceeded $36 trillion in April 2025, continues to rise, drowning the government in interest payments.
When asked if cryptocurrencies could replace the dollar, Dalio acknowledged their evolving role. "Crypto is now an alternative currency that has its supply limited," he explained, noting that it becomes more attractive as dollar supply rises or demand falls. He contrasted this with fiat currencies burdened by large debts, which struggle to store value. However, Dalio expressed skepticism about stablecoins backed by U.S. Treasuries posing a systemic risk, though he flagged "a fall in the real purchasing power of Treasuries" as a genuine concern.
Geopolitical actions, particularly U.S. sanctions like those imposed on Russia's central bank reserves, have intensified doubts about the dollar's safety. Investment firm VanEck highlighted that such sanctions forced a global "rethink of what reserve assets actually mean," pushing gold to record highs. Gold has surged toward $5,000 per ounce, a target once considered "extreme," according to David Wilson of BNP Paribas.
Dalio's warnings coincide with heightened trade tensions, fueled by President Donald Trump's threats of tariffs on European countries. The hedge fund manager suggested Trump's economic policies, including those on digital assets, could be weakened after the 2026 midterm elections. Meanwhile, in Davos, crypto leaders like Coinbase CEO Brian Armstrong are advocating for tokenization and discussing digital asset legislation with global policymakers.
