Original author: Billy Bambrough, ForbesCompiled by: AididiaoJP, Foresight News
Since the US went to war with Iran, Bitcoin has surged 30% (two massive shocks are currently heading for Bitcoin's price).
However, the Bitcoin price remains far from its all-time high of $126,000 in 2025, despite US Secretary of Defense Pete Hergesses stating that China is secretly hoarding Bitcoin.
Now, as traders prepare for an "imminent" major Bitcoin move from the White House, legendary billionaire Ray Dalio warns that the US dollar is teetering and on the brink of collapse—meanwhile, JPMorgan analysts predict a massive rotation of funds from gold into Bitcoin.
The US dollar is suffering persistent depreciation, with some fearing it could evolve into a full-blown collapse—thereby boosting gold and Bitcoin prices.
"The US now spends $7 trillion a year and takes in about $5 trillion, so it spends 40% more than it takes in," said Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, in an interview on The New York Times' "Interesting Times" podcast.
"That deficit has been going on for a while, so it has about six times as much debt as income. Historically, that creates problems."
Updated May 11th: Following reports that US national debt surpassed 100% of gross domestic product (GDP), Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, warned that the US is entering a debt spiral.
"When that happens, at some point you get into this debt spiral," Goldwein told The New York Times. "The only way to stop it is with some sort of systemic shock."
Meanwhile, the Congressional Budget Office (CBO) disclosed last week that the US Treasury has paid $628 billion in net interest so far this year to service its debt.
"Net outlays for interest on the public debt increased by $41 billion (or 7%) because debt was larger than it was during the first seven months of fiscal year 2025 and long-term interest rates were higher. A decline in short-term interest rates partially offset the overall growth in interest payments," the CBO said.
Gold prices have rebounded in recent weeks after falling towards $4,000 per ounce in April, with analysts pointing to inflation pressures and the debt spiral as drivers of its rise.
"High inflation, growing sovereign debt, and persistent global uncertainty continue to enhance gold's appeal. The market doesn't need new catalysts—the existing ones are always there," said Max Baecker, president of American Hartford Gold (AHG), in emailed comments.
US debt has soared sharply in recent years due to massive government spending during and after the Covid pandemic and lockdowns, while rapid interest rate hikes to curb inflation have further increased the cost of servicing the $39 trillion debt pile.
"So when we look back in history, we see that in all such periods, all fiat currencies depreciate and gold goes up," Dalio said, noting that gold is currently the "second-largest reserve currency for central banks."
When asked if the economy is headed for a "crisis and collapse," Dalio said a future "financial crisis would mean a very limited ability to spend," adding he "doesn't think any fiat currency will be an effective store of wealth."
Dalio's warning coincides with views from analysts at Wall Street giant JPMorgan, who believe the "devaluation trade is rotating from gold into Bitcoin."
Gold prices have doubled over the last two years, rising alongside silver, as traders bet persistent inflation and Federal Reserve money printing will debase and dilute the dollar.
In a report seen by The Block, JPMorgan analysts led by Managing Director Nikolaos Panigirtzoglou said they see Bitcoin (dubbed "digital gold" due to its supply cap and immutability) overtaking gold as a devaluation trade post-Iran conflict, as Bitcoin ETF inflows have surpassed those for gold ETFs.
In March, another billionaire investor, Stanley Druckenmiller, predicted the dollar will no longer be the world's reserve currency in 50 years—potentially replaced by Bitcoin or crypto.
"We're doing everything we can to destroy it," Druckenmiller said, likely referring to the soaring US budget deficit, which he previously described as a "debt bomb." The dollar "might outlive me, but I doubt it'll be the reserve currency in 50 years."
Druckenmiller called the dollar the "cleanest dirty shirt" and said he didn't know what might replace it as the world's reserve currency, but it could be "some kind of crypto thing that I hate," consistent with a prediction he first made in 2021.
Furthermore, Tesla billionaire Elon Musk has also (repeatedly) predicted the end of the dollar, fueling speculation he is preparing for a major Bitcoin move.
Musk has warned the world is heading for a post-fiat currency era and declared that "energy is the real currency," sparking speculation among Bitcoin supporters that he is quietly backing crypto.
Meanwhile, former Federal Reserve Chair Janet Yellen has warned that President Donald Trump could be pushing the dollar toward "hyperinflation"—a scenario some believe could ignite Bitcoin's price.
