Ray Dalio warns that the dollar is on the brink of collapse: Bitcoin is the biggest winner of the $39 trillion debt crisis.

Written by: Billy Bambrough, Forbes

Translated by: AididiaoJP, Foresight News

Since the United States went to war with Iran, Bitcoin has surged by 30% (two huge shocks are currently hitting the Bitcoin price).

However, the Bitcoin price is still far from the historical high of $126,000 in 2025, despite U.S. Secretary of Defense Peter Hegseth stating that China is secretly stockpiling Bitcoin.

Now, as traders prepare for the "upcoming" major White House Bitcoin action, legendary billionaire Ray Dalio warns that the U.S. dollar is teetering on the edge of collapse—meanwhile, JPMorgan analysts predict funds will rotate massively from gold to Bitcoin.

The U.S. dollar is experiencing ongoing depreciation, leading some to worry that this could evolve into a full-blown collapse—thereby boosting the prices of gold and Bitcoin.

"The U.S. is currently spending $7 trillion annually, with revenues of about $5 trillion, so spending exceeds revenue by 40%," Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, stated during an interview on The New York Times' "Interesting Times" podcast.

"This deficit has persisted for some time, making the debt roughly six times the income. Historically, such situations lead to problems."

May 11 update: Following reports that U.S. debt has exceeded 100% of GDP, Mark Goldwyn, senior vice president of the Committee for a Responsible Federal Budget, warned that the U.S. is entering a debt spiral.

"When this occurs, at some point, you get caught in this debt spiral," Goldwyn told The New York Times. "The only way to stop it is through some kind of systemic shock."

Meanwhile, the Congressional Budget Office (CBO) revealed last week that the U.S. Treasury has paid $628 billion in net interest for debt servicing this year.

"Net interest expenditures on public debt increased by $41 billion (or 7%) as debt levels are larger than the first seven months of FY 2025 and long-term interest rates are higher. The decline in short-term rates has partially mitigated the overall growth in interest payments," the CBO stated.

Gold prices have rebounded in recent weeks after dipping toward $4,000 per ounce in April, with analysts noting inflation pressures and the debt spiral as driving forces behind the increase.

"High inflation, growing sovereign debt, and ongoing global uncertainty continue to enhance gold’s appeal. The market does not need new catalysts—the existing catalysts have always been there," said Max Baecker, president of American Hartford Gold (AHG), in an email comment.

In recent years, due to massive government spending during the COVID-19 pandemic and lockdowns, U.S. debt has surged dramatically, while rapid interest rate hikes to contain inflation have further increased the cost of servicing the $39 trillion debt pile.

"So when we look back in history, we see that during all such periods, all fiat currencies depreciate, while gold goes up," Dalio said, noting that gold is now the "second largest reserve currency for central banks."

When asked whether the economy is heading toward a "crisis and collapse," Dalio stated that future "financial crises will mean very limited spending capability," adding that he "does not believe any fiat currency will be a viable store of wealth."

Dalio's warning coincides with the views of JPMorgan analysts on Wall Street, who believe that "devaluation trades are rotating from gold to Bitcoin."

Over the past two years, the price of gold has doubled, along with silver, as traders bet on sustained inflation and the Federal Reserve's money printing causing the dollar to depreciate and dilute.

In a report seen by The Block, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou noted they see Bitcoin, referred to as "digital gold" due to its supply cap and immutability, surpassing gold as a devaluation trading tool in the wake of the Iran conflict, as inflows into Bitcoin ETFs have outpaced those into gold ETFs.

In March of this year, another billionaire investor, Stanley Druckenmiller, predicted that the dollar will no longer be the world's reserve currency in 50 years—potentially replaced by Bitcoin or cryptocurrencies.

"We are doing everything we can to destroy it," Druckenmiller said, possibly referring to the soaring U.S. budget deficit, which he previously described as a "debt bomb." The dollar "may outlive me, but I doubt it will still be a reserve currency in 50 years."

Druckenmiller called the dollar the "cleanest dirty shirt," and stated he doesn't know what could replace the dollar as the world reserve currency, but it could be "some kind of crypto thing I hate," aligning with his prediction made in 2021.

Additionally, Tesla billionaire Elon Musk has also (multiple times) predicted the end of the dollar, sparking speculation that he is preparing for major Bitcoin actions.

Musk warned that the world is heading toward a post-fiat currency era, declaring that "energy is the real currency," which has led to speculation among Bitcoin supporters that he is quietly endorsing cryptocurrencies.

Meanwhile, former Federal Reserve Chair Janet Yellen warned that U.S. President Donald Trump may be pushing the dollar toward "hyperinflation"—something that some believe could trigger a spike in Bitcoin prices.