While the global financial market is shaken by new tariff policies from President Trump, billionaire Ray Dalio – founder of the world's largest hedge fund Bridgewater Associates – has warned: “This is not just a short-term shock, but a sign of the unraveling of the global order as we once knew it.”
Behind the wave of tariffs: A comprehensive crisis?
At the end of Monday, President #DonaldTrump threatened to increase taxes by an additional 50% on Chinese goods, igniting a fierce response from the Chinese Ministry of Commerce, which stated that the country would “firmly implement countermeasures” to protect national interests.
However, according to Ray Dalio, the tax dispute is only the surface manifestation of deeper conflicts that are undermining the foundations of the modern world. In an analysis published on Monday, he described the current situation as a 'once-in-a-lifetime chaos', reflecting the collapse of the global monetary, political, and geopolitical order.
“People are blaming Trump for tax policies, but most are overlooking the underlying factors that brought him to power and created these policies,” – Dalio wrote.
5 'underlying forces' reshaping the world
According to Dalio, tariffs are merely a consequence of 5 dangerous trends quietly reshaping the global order:
Public and private debt crisis: Global debt levels are becoming unsustainable, as nations and individuals borrow too much while lenders hold high-risk assets. Dalio cites the relationship between the U.S. and China as a clear example of debt imbalance.
Domestic political instability: Social divisions, political polarization, and distrust in the system have forced politicians to adopt 'populist' and controversial policies to maintain power.
Deep geopolitical changes: The post-World War II order, led by the U.S., is being challenged by the rise of China and new powers.
The impact of nature: Climate change, pandemics, and natural disasters are causing economic damage and disrupting global supply chains.
Technology and AI: Technological breakthroughs, especially artificial intelligence (AI), are fundamentally changing how the economy operates, causing imbalances in the labor force and redefining asset values.
Crypto and stocks: Falling together due to macro instability
The event 'Liberation Day' (#Liberationday ) marked the largest decline of the year in the cryptocurrency market. Bitcoin fell below the $75,000 threshold, dragging the entire market down more than 7% over the weekend.
Notably, crypto is moving in sync with the U.S. stock market, particularly the tech stock group. According to Dalio, this is an inevitable consequence of the tight linkage between global capital flows, where instability in debt, trade, and policy will simultaneously impact all types of risky assets.
“When unsustainable debt conditions and a fracturing global order become specific policies like tax increases or economic sanctions, investors will flee from risky assets in search of safety,” – Dalio analyzed.
Divergence signal: Is Bitcoin separating from the tech stock group?
Despite a high correlation with stocks, recent signs suggest that Bitcoin may be gradually 'decoupling'. When the yield on 10-year U.S. Treasury bonds rises sharply, which usually causes risky assets to plummet, Bitcoin's reaction has been relatively 'calm'.
Mr. Matthew Sigel, head of digital asset research at VanEck, commented:
“Bitcoin is not falling sharply like tech stocks despite rising interest rates. This indicates that Bitcoin is beginning to detach from traditional sensitivities to monetary policy.”
If this continues, Bitcoin could emerge as a new safe haven asset, especially as the traditional financial system comes under increasing pressure from public debt, inflation, and political instability.
Conclusion: Is the market about to enter a 'new era'?
Ray Dalio's warning should not be taken lightly. If he is correct, what we are witnessing is only the prologue of a profound change cycle lasting many years – where not only financial markets but also geopolitics and the global economic structure will be rewritten.
For investors:
Don't just look at today's prices, but watch the macro changes behind them.
Cryptocurrency can be an opportunity, but it is also fraught with risks in this uncertain period.
The divergence between Bitcoin and stocks could be the first signal of a new asset order – where trust will no longer be placed entirely in traditional markets.