Ray Dalio, the billionaire founder of the world’s largest hedge fund, Bridgewater Associates, has expressed grave concerns regarding the recent turmoil in cryptocurrency markets and broader financial instability. He attributes this chaos to President Donald Trump’s aggressive tariff strategies, warning that it signifies a more profound collapse of the global financial order that many may not fully grasp.
In a statement issued on Monday, Dalio characterized the unprecedented market fluctuations as a “once-in-a-lifetime” incident indicative of a systemic crisis. He highlighted that Trump’s sweeping tariffs, especially those aimed at China, are indicative of deeper, long-term economic transformations taking place globally.
Trump Threatens 50% Tariff Hike on China; Beijing Vows Swift Retaliation
On the same day, Trump escalated tensions by threatening to raise tariffs on Chinese imports by an additional 50%. This prompted a rapid reaction from China’s Ministry of Commerce, which vowed to “resolutely take countermeasures” to safeguard its economic interests.
Dalio acknowledged Trump’s influence in initiating the current financial volatility while stressing that the underlying causes are more complex. He remarked, “Most people are losing sight of the underlying circumstances that got him elected president and brought these tariffs about.”
Identifying five structural forces at play, Dalio described the turmoil as being fueled by unsustainable debt, internal political strife, shifting geopolitical relationships, environmental challenges, and technological disruption, particularly due to advancements in artificial intelligence.
He cited the deteriorating U.S.-China debt relationship as a clear illustration of how global financial disparities have become increasingly unmanageable. “Debt has become unsustainable because of the large imbalance between debtor-borrowers who owe too much and lender-creditors who already hold too much,” Dalio added.
Moreover, cryptocurrency markets, once thought to be insulated from traditional financial markets, have recently exhibited a correlation with the volatility of U.S. equities. Bitcoin saw a decline, dropping below $75,000 amid a broader 7% contraction in the crypto market over the weekend. Dalio interprets this trend as symptomatic of a larger breakdown in current monetary, political, and geopolitical systems.
https://t.co/Xpdl8fYoBg
— Ray Dalio (@RayDalio) April 7, 2025
He pointed out that the interconnected nature of global trade and capital flows means that shocks in one area can affect all risk assets. As confidence diminishes, investors tend to withdraw simultaneously, leading to cascading ramifications throughout the markets.
Could China’s Yuan Devaluation Trigger a Bitcoin Bull Run? Hayes Thinks So
In the midst of this turmoil, Arthur Hayes, founder of BitMEX, has suggested that China’s potential response to U.S. tariffs—a devaluation of the yuan—could spark a new surge of capital into Bitcoin. Drawing analogies to previous occurrences in 2013 and 2015, Hayes noted that similar economic conditions previously drove Chinese investors toward Bitcoin as a safeguard against currency devaluation.
If not the Fed then the PBOC will give us the yachtzee ingredients. CNY deval = narrative that Chinese capital flight will flow into $BTC. It worked in 2013 , 2015, and can work in 2025. Ignore China at your own peril. pic.twitter.com/LAOeQZEjZt
— Arthur Hayes (@CryptoHayes) April 8, 2025
As reported, cryptocurrency markets faced significant corrections during what has been dubbed “Black Monday,” with total liquidations surpassing $1.36 billion within the day. U.S. stock futures also tumbled, further elevating concerns about an impending market crash.
S&P 500 futures showed a decline of 5.98%, while Nasdaq 100 futures dipped by 6.2%, and Dow futures fell by 5.5%, indicating a tumultuous start to the trading week. In light of these developments, Bill Ackman, a prominent hedge fund manager and Trump supporter, publicly urged the administration to pause the escalation of tariffs for 90 days, warning that the current trajectory risks precipitating an “economic nuclear winter.”
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