Original Title: 'It is Now Happening'—Urgent U.S. Dollar 'Collapse' Warning Issued As Markets Brace For Gold And Bitcoin Price Shocks
Original Author: Billy Bambrough, Forbes
Translated by: Peggy, BlockBeats
Editor’s Note: The threat of tariffs from Trump has resurfaced, the dollar is weakening, gold has reached a historic high, while Bitcoin has fallen below $90,000, nearly erasing its gains for the year. As inflation data is about to be released, market concerns about stagflation are rising, and funds are flowing back into "anti-devaluation" assets. This article outlines why gold and Bitcoin have shown drastically different trends amid this round of macro shocks.
The following is the original text:
In recent months, there has been a clear divergence in the trends of Bitcoin and gold: gold has continued to soar, while Bitcoin's price has significantly retreated. At the same time, the trade war initiated by U.S. President Donald Trump has escalated again, posing potential pressure on the dollar.
Bitcoin's price experienced a sharp drop overnight, falling from nearly $96,000 to just above $90,000 in just a few minutes. Meanwhile, after Trump threatened to escalate tariffs on eight NATO allies and demanded Denmark reach an agreement over Greenland, gold prices hit a new historic high.
Now, as the CEO of Bank of America issues a severe cryptocurrency warning of "$6 trillion," traders are preparing for inflation data that may exceed previous expectations this week—further triggering concerns about "unprecedented stagflation."
Billionaire investor and hedge fund giant Bridgewater Associates founder Ray Dalio warned that the recent weakening of the dollar indicates that the "collapse of the dollar as the world's reserve currency" he has long predicted is "happening now."
Dalio posted on X: "The existing fiat currency order, domestic political order, and international geopolitical order are all collapsing, and we are on the brink of war."
Last year, the dollar, measured by the U.S. Dollar Index, fell nearly 10% cumulatively. The market generally expects the dollar to weaken further this year, while gold, silver, and Bitcoin prices may see significant increases.
Dalio wrote: "All of this is happening because a major cycle driven by five forces is in motion." The five forces he refers to come from his book "Principles for Dealing with the Changing World Order," which are: economic cycles, domestic turmoil, great power conflicts, natural disasters, and technological developments.
Dalio also mentioned a video showing that the era dominated by the U.S. and the dollar is receding, giving way to a new cycle led by China.
In this 2023 video, Dalio stated: "When a newly rising great power becomes strong enough to compete with the dominant power, which is experiencing domestic order collapse and increasing external conflicts, the most typical outcome is often war."
He further stated: "In these internal and external wars, new winners and losers will emerge. Subsequently, the winners will come together to establish a new world order, and thus a new cycle will begin again."
Meanwhile, as the dollar faces its largest single-day drop in over a month, Bitcoin's price has fallen below $90,000, nearly erasing all gains since 2026; while gold has once again hit a historic high. FxPro Chief Market Analyst Alex Kuptsikevich commented in an email: "Bitcoin is facing a double blow from tariffs."
He pointed out: "Trump's intention to make the U.S. the global crypto capital has, to some extent, turned crypto assets into a 'U.S. asset.' Therefore, when the logic of 'sell America' resurfaces, the bottom support for Bitcoin bulls is quickly withdrawn."
U.S. Federal Reserve Chairman Jerome Powell faced pressure from the so-called "debasement trade" last year—this trade drove up the prices of gold and Bitcoin. (Image source: Getty Images)
Economists at Barclays and Morgan Stanley have raised their forecasts for the U.S. December Personal Consumption Expenditures (PCE) price index to 2.8% or 2.9%. Meanwhile, Andy Schneider of BNP Paribas wrote in a report seen by Reuters that this data will be "significantly" higher than last week's reported 2.7% Consumer Price Index (CPI).
The latest PCE data will be released on Thursday. PCE is the Fed's preferred measure of inflation and excludes volatile food and energy prices. This data could reignite market concerns about the so-called "stagflation," where weak economic growth coexists with soaring prices.
Gold investor Peter Schiff posted on X: "The impending collapse of the dollar will drive consumer prices soaring." He has consistently been bearish on the dollar and has a critical stance on Bitcoin. "Get ready for unprecedented stagflation."
Before the latest inflation data is released, the dollar has weakened again due to the return of last year's so-called "debasement trade." This trading logic is characterized by investors betting on a weaker dollar while flooding into scarce assets like Bitcoin, gold, silver, copper, and equities.
The Bitcoin rally this year is being impacted by Trump's latest round of trade wars. This conflict has not only suppressed the dollar but also boosted gold. Source: Forbes Digital Assets
Trade Nation Senior Market Analyst David Morrison commented in an email: "President Trump has issued new tariff threats to trade partners and NATO allies regarding Greenland, triggering a market sell-off of the dollar." He added: "The dollar index quickly fell back below 99.00. Last weekend, the index had reached a six-week high."
As the dollar weakens, both gold and silver prices have reached historic highs. David Wilson, head of commodity strategy at BNP Paribas, told Bloomberg that not long ago, the market thought a gold price of $5,000 per ounce was a "big target," but now that level is almost within reach.
Meanwhile, traders are betting that Bitcoin's weak trend will continue, as geopolitical uncertainty is suppressing risk appetite.
Nic Puckrin, co-founder of Coin Bureau and digital asset analyst, commented in an email: "As it stands, unless buying pressure comes in, we are likely to see further declines, with strong support around $88,000." He added: "The uncertainty and concerns surrounding Greenland are likely to worsen in the short term before gradually improving."
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