Ray Dalio warned the U.S. stands “on the brink” of transitioning from Stage 5 pre-breakdown to Stage 6 systemic collapse as Bitcoin is trading defensively at $88,000, trapped in a 60-day range by record institutional selling pressure from American counterparties.
The billionaire investor’s latest analysis of the “Big Cycle” coincides with Bitcoin’s failure to live up to its “digital gold” narrative, while traditional safe havens surge to all-time highs.
Dalio’s framework identifies bankrupt government finances and wealth gaps as the “single most reliable leading indicator of civil war or revolution,” conditions he argues now characterize American reality.
Meanwhile, Wintermute’s desk reports that Bitcoin remains stuck between $85,000 and $94,000 as U.S. spot ETF products hemorrhage capital and the Coinbase premium trades at a persistent discount, indicating that domestic institutions are driving bearish momentum.
Dalio’s long essay positions current American conditions within Stage 5 of his Big Cycle framework, where “bad financial conditions and intense conflict” precede systemic breakdown.
“We are now clearly on the brink of crossing from Stage 5 (pre-breakdown) to Stage 6 (breakdown),” he wrote, pointing to unsustainable debt loads that force governments to either “print a lot of money, which depreciates its value” or implement painful austerity.
The analysis comes as Bitcoin trades range-bound for 60 consecutive days, an unusual pattern for an asset class often marketed as protection against exactly the monetary debasement Dalio describes.
Gold climbed above $5,066 per ounce on Tuesday while silver surged 6.4% to $110.60, both setting fresh records as investors sought traditional inflation hedges.
Dalio warned that “later stages may involve capital controls, reserve freezes, and cross-border restrictions, turning funds into political tools,” conditions that typically favor “freely transferable assets” and investments “prioritizing resistance to freezing and blockades.“
Bitcoin proponents have long argued that crypto fits this profile, yet the asset has failed to attract safe-haven flows amid elevated macro uncertainty.
Wintermute’s OTC desk identified American selling pressure as the primary force keeping Bitcoin suppressed within its trading range.