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Ray Dalio Warns of Banks Shying away from Fiat, Praises Gold Surging

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Ray Dalio Warns of Banks Shying away from Fiat, Praises Gold Surging


The hedge fund supervisor stated central banks weren’t dealing with fiat in the identical approach, warning of a breakdown within the world financial order.

Billionaire hedge fund manager Ray Dalio issued a stark warning for the global economy amid US President Donald Trump’s threats of tariffs and seemingly unpredictable economic policies for the country.

Speaking to CNBC’s Andrew Ross Sorkin from the World Economic Forum (WEF) in Davos, Switzerland on Tuesday, Dalio said the monetary order was “breaking down,” warning of a change in behavior of how central banks handled fiat.

According to the hedge fund manager, both fiat holders and “those who need it” were concerned about each other, creating a “big issue” down the line.    

“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,” said Dalio. “The biggest market to move last year was the gold market, far better than the tech markets and so on.” 

Source: Ray Dalio

Dalio’s remarks came hours after Trump threatened tariffs on European countries after leaders pushed back on the president’s public statements questioning Denmark’s “right of ownership” to Greenland.

Related: Bitcoin holders see first 30-day stretch of realized losses since late 2023

Dalio said in December that Trump’s economic 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 are able to retake control of one or more chambers of Congress.

The US president is expected to travel to Davos on Tuesday to attend talks at the World Economic Forum.

Crypto leaders gather in Davos

In addition to Trump and other world leaders, many executives from crypto companies will be in Switzerland this week for WEF events.

Coinbase CEO Brian Armstrong reported on the ground from Davos on Monday, saying he would talk to world leaders on “how crypto can update their financial systems” and push for tokenization to “democratize access to capital markets.” Armstrong added that he would discuss the digital asset market structure bill under consideration in the US Senate with bank executives after a markup on the legislation was postponed last week.