Ray Dalio Blames Trump Tariffs for Market Meltdown, Crypto Plunge

Billionaire hedge fund founder Ray Dalio has expressed his concerns about the recent crypto and market meltdown, which he believes was triggered by President Donald Trump’s aggressive new tariff policies. Dalio, who founded Bridgewater Associates, described the current market chaos as a “once-in-a-lifetime” event that signals a broader systemic breakdown. He emphasized that the real causes of the market volatility run deeper than the tariffs themselves, pointing to five structural forces: unsustainable debt levels, internal political divisions, evolving geopolitical dynamics, environmental pressures, and technological disruption—especially artificial intelligence.

Dalio highlighted the deteriorating U.S.-China debt dynamic as an example of how global financial imbalances have become untenable. He noted that debt has become unsustainable because of the large imbalance between debtor-borrowers who owe too much and lender-creditors who already hold too much. This imbalance, along with other structural forces, is contributing to the current market chaos.

Crypto markets, which were once seen as disconnected from traditional finance, have recently mirrored the volatility of U.S. equities. Bitcoin fell below $75,000 during the weekend sell-off, while the broader crypto market dropped 7%. Dalio sees this move as indicative of the broader collapse of existing monetary, political, and geopolitical frameworks. He noted that the interconnectedness of global trade and capital flows means shocks in one area now ripple through all risk assets. As trust erodes, investors flee simultaneously, creating cascading effects across markets.

Meanwhile, BitMEX founder Arthur Hayes has argued that China’s response to U.S. tariffs—particularly a potential devaluation of the yuan—could ignite a fresh wave of capital flight into Bitcoin. Drawing parallels to previous years like 2013 and 2015, Hayes argued that similar economic conditions led Chinese investors to turn to BTC as a hedge against currency depreciation. He suggested that if not the Federal Reserve, then the People's Bank of China will provide the necessary ingredients for a yachtzee, implying that a devaluation of the yuan could lead to a narrative of Chinese capital flight flowing into Bitcoin.

As reported, cryptocurrency markets faced a brutal correction on what’s being dubbed “Black Monday,” with total liquidations exceeding $1.36 billion in the day. Crypto wasn’t alone in the selloff. U.S. stock futures also plunged Sunday night, heightening fears of a broader market crash. Prominent hedge fund manager and Trump supporter Bill Ackman publicly urged the administration to pause the tariff escalation for 90 days, warning that the current trajectory could spark an “economic nuclear winter.”