Bitcoin prices have experienced significant volatility in recent weeks, recovering from April lows of $75,000 amid escalating global trade tensions and growing concerns about a potential economic downturn.
As Donald Trump’s aggressive tariff policies fuel what some describe as a dollar “confidence crisis,” market observers are weighing the cryptocurrency’s prospects against a backdrop of macroeconomic uncertainty.
Despite Michael Saylor’s Strategy issuing an unexpected bitcoin “sell” warning, the cryptocurrency has demonstrated resilience in recent trading sessions. This recovery comes as billionaire Ray Dalio sounds the alarm about the U.S. economy potentially facing a crisis worse than the 2008 financial collapse.
Dalio’s Doomsday Scenario
“I think that right now we are at a decision-making point and very close to a recession,” warned Dalio, founder of Bridgewater Associates, during an NBC interview.
“And I’m worried about something worse than [the 2008] recession if this isn’t handled well.” Notably, Dalio issued similar warnings in 2007, just before the global financial crisis.
The founder of the world’s largest hedge fund expressed particular concern about Trump’s tariff policies, describing them as causing a “breaking down of the monetary order.”
In a recent detailed post on X, Dalio elaborated: “We are seeing a classic breakdown of the major monetary, political, and geopolitical orders. This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place.”
Trade tensions have escalated rapidly, with Trump imposing tariffs of up to 145% on many Chinese exports to the United States. China has retaliated with 125% levies on American products. Additionally, Trump has implemented a blanket 10% tax on goods entering the U.S., while giving numerous countries a 90-day deadline before potentially imposing substantially higher charges.
These developments have put significant pressure on the U.S. dollar. The ICE U.S. Dollar Index, which measures the greenback against a basket of global currencies, fell sharply last week, dropping below the 100 threshold and potentially heading back toward its 2022 trading range.
Bitcoin Staying Resilient
Interestingly, bitcoin has climbed over the past month despite growing recession fears. Betting markets currently place the odds of a recession at between 40% and 60%, according to Coindesk.
BlackRock’s head of digital assets, Robbie Mitchnick, suggested last month that a recession could actually boost bitcoin prices. “I don’t know if we’ll have a recession or not, but a recession would be a big catalyst for bitcoin,” Mitchnick told Yahoo Finance. He noted that typical recession responses—increased fiscal spending, growing deficits, lower interest rates, and monetary stimulus—have historically benefited bitcoin.
Analysts from the Bitfinex cryptocurrency exchange also remain optimistic about bitcoin’s prospects. “Bitcoin is consolidating at higher levels (and above where it was trading before Trump’s election win in November last year), and the structural groundwork—ranging from institutional infrastructure to sovereign-level interest—is being quietly laid,” they noted in a recent analysis. “The market is coiled, not broken, and the coming months could bring significant upside if catalysts align.”
Back in December, Dalio warned of an impending “debt crisis” that he expects will trigger a sharp decline in the U.S. dollar’s value. U.S. debt has grown substantially in recent years, exceeding $35 trillion at the beginning of 2025, with COVID-19 stimulus measures contributing significantly to government spending and the subsequent inflation surge in 2022.
