Ray Dalio's has issued a lengthy warning in his latest essay | Source: Getty Images
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Key Takeaways
Ray Dalio has issued a stark warning that great-power conflict is increasingly being fought through “capital wars.”
In his view, the conditions make gold the default store of value.
Bitcoin’s “digital gold” narrative is being tested.
Billionaire investor Ray Dalio has warned that the post-World War II global order has “broken down,” arguing that rising great-power tensions, capital wars and mounting debt risks are reshaping the international financial system.
In a recent expansive essay, the Bridgewater Associates founder described the world as entering a period of “great power politics,” marked by sanctions, asset freezes and the weaponization of money.
In that environment, Dalio has pointed investors toward gold, not crypto, as a preferred store of value.
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Dalio said the decades-long system of U.S.-led global stability is unraveling, with countries increasingly acting in their own strategic interests rather than adhering to shared rules.
“The world order as it has stood for decades no longer exists,” he said, describing an era of escalating trade and geopolitical conflicts.
In his framework of historical cycles, he argues that periods of disorder feature debt monetization and financial repression, developments that have undermined confidence in fiat money in the past.
“As for investing, sell out of all debt and buy gold,” Dalio wrote in his recent essay, arguing that wars are financed by “borrowing and printing money, which devalues debt and money.”
He added that during conflict, “gold … is the coin of the realm during wars,” as trust in credit systems erodes.
Why Gold Over Crypto?
Notably absent from Ray Dalio’s latest analysis was any endorsement of Bitcoin or other cryptocurrencies as a hedge against geopolitical breakdown.
Instead, he pointed to gold’s long-standing role as a trusted store of value in periods of financial repression, arguing that credit-based systems become fragile when governments weaponize capital flows.
The omission comes as investors have increasingly shifted toward traditional defensive assets over the past few months.
Precious metal prices have surged to all-time highs, while risk-sensitive markets such as crypto have seen prices plummet.
Is Bitcoin Still ‘Digital Gold’?
Bitcoin has long been marketed by its fiercest supporters as “digital gold,” pointing to its scarcity and decentralization as a hedge against currency debasement and political risk.
But its recent dramatic price falls have raised concerns over whether investors are still treating it as a defensive store of value.
Alex Carchidi, a crypto analyst for The Motley Fool, wrote that Bitcoin is still arguably a “store of value today — just not as good a one as actual gold.”
“Time is an ingredient here, and Bitcoin simply has less of a history than gold,” he wrote.
Unlike gold, which has tended to attract inflows during geopolitical shocks, Bitcoin has often moved in tandem with broader U.S. technology stocks.
Still, some crypto investors argue that Bitcoin’s long-term hedge thesis remains intact, pointing to its ability to still move across borders outside of the banking system.
CBDCs and State Control
While Dalio did not directly address crypto in his latest essay, he previously expressed skepticism about central bank digital currencies (CBDCs).
“If they’re not able to offer interest… then they’re not an effective vehicle to hold it in,” he said, arguing that investors would likely favor money market funds or bonds to avoid depreciation.
His larger concern centered on privacy and government control.
“There will be no privacy,” Dalio warned, adding that “all transactions done with digital currencies will be known.”
He cautioned that such systems could give governments sweeping new powers, including the ability to tax more directly or potentially freeze access to funds.
“They can tax that way. They can take your money,” Dalio said.
Ray Dalio’s Familiar Warning
Dalio’s latest comments echo warnings he has made for years about the durability of the dollar and wider economy.
Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Dalio argued that structural changes were underway.
“The monetary order is breaking down,” Dalio said.
“What I mean by the monetary order is that fiat currencies and debt as a store of wealth are not being held by central banks in the same way.”
Dalio has repeatedly pointed to shifts in reserve allocations as signs that confidence in traditional monetary assets is weakening.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
