Billionaire hedge fund manager Ray Dalio has issued a stark warning for the global economy, citing US President Donald Trump’s threats of tariffs and the country's seemingly unpredictable economic policies.
Speaking to CNBC’s Andrew Ross Sorkin from the World Economic Forum (WEF) in Davos, Switzerland, Dalio stated that the monetary order was “breaking down.” He cautioned of a significant change in how central banks handle fiat currencies.
According to the hedge fund manager, both fiat holders and “those who need it” are exhibiting concern for each other, which he believes will create a “big issue” down the line.
Dalio elaborated, “Fiat currencies and debt as a storehold of wealth, is not being held by central banks in the same way, and … there was a change. The biggest market to move last year was the gold market, far better than the tech markets and so on.”
Geopolitical Tensions and Economic Uncertainty
Dalio’s remarks come in the wake of President Trump’s threats of imposing tariffs on European countries. These threats followed pushback from European leaders regarding the president’s public statements questioning Denmark's “right of ownership” to Greenland.
In December, Dalio had previously commented on Trump’s economic policies. He suggested that these policies, including those affecting digital asset regulation, could be “weakened greatly in the 2026 mid-term elections and reversed in the 2028 elections” if Democrats regain control of one or more chambers of Congress.
President Trump was expected to travel to Davos to attend discussions at the World Economic Forum.
Crypto Leaders Convene in Davos
Beyond world leaders like President Trump, the World Economic Forum events in Switzerland this week are also attracting numerous executives from cryptocurrency companies.
Coinbase CEO Brian Armstrong reported from Davos, indicating his intention to engage with world leaders on the topic of how crypto can enhance their financial systems. He also plans to advocate for tokenization as a means to “democratize access to capital markets.” Armstrong further stated that he would discuss the digital asset market structure bill, currently under consideration in the US Senate, with bank executives. This discussion follows a postponement of the markup session for the legislation last week.