Crypto markets have gained new momentum as traders respond to Ray Dalio's dire warning about U.S. debt and the dollar's decline.
On May 19, Bridgewater founder Ray Dalio raised concerns, criticizing Moody's recent decision to downgrade the U.S. credit rating, which he claimed still underestimates the actual risk, which is America's $36.2 trillion debt.
The U.S. government may print money to pay for the debt, he cautioned, causing the dollar to weaken and the purchasing power of bondholders to be eroded.
In December 2024, Ray Dalio also urged investors to opt for Bitcoin over debt assets like bonds.
Analysts weigh in
Bitunix analysts expect Dalio's comments to further shift cash into non-sovereign, inflation-insensitive assets. They say Bitcoin and Ethereum as the primary beneficiaries of the transition since both have decentralized networks and limited supply.
"If Bitcoin holds the $100,000 level, we expect a breakout toward $110,000 in the near term," Bitunix analysts told TheStreet Roundtable .
The company recommends that investors focus on major cryptocurrencies and take USD-pegged stablecoins and utility tokens that can withstand inflation.
Analysts say traders should also watch U.S. government bond rates and spending plans closely, since these are causing money to move back and forth between traditional markets and cryptocurrencies.
Analysts said traders should also pay close attention to U.S. bond yields and fiscal policy, which continue to switch capital between conventional markets and crypto. If the U.S. spends too much or borrows too much, it potentially leads to money printing, which can produce inflation and weaken the dollar-driving investors to crypto.
Tim Draper, an American venture capital investor, also reinforces this view , claiming that Bitcoin will become the world's currency in ten years, usurping the U.S. dollar.
Now that all three major rating agencies have downgraded U.S. debt, the appeal of crypto as a hedge continues to climb.
Analyst has a blunt response to billionaire Ray Dalio on the U.S. 'going broke' first appeared on TheStreet on May 20, 2025
