Bitcoin has suddenly rocketed higher, climbing back over $100,000 per bitcoin as FOMO sweeps Wall Street.
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The bitcoin price, up almost 150% over the last 12 months, has surged after the latest U.S. inflation data showed prices are rising at rates expected by economists, putting a Federal Reserve interest rate cut back on the table next week.
Ahead of the latest consumer price index (CPI) data, the influential billionaire investor Ray Dalio warned of a looming “debt crisis” which he expects will trigger a sharp decline in the value of the U.S. dollar.
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Federal Reserve chair Jerome Powell is grappling with a spiraling $35 trillion debt problem that … [+]
“I believe that there would likely be a pending debt money problem,” Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, said during a speech at Abu Dhabi Finance Week it was reported by the South China Morning Post.
U.S. debt has soared over recent years, topping $34 trillion at the beginning of 2024, with Covid and lockdown stimulus measures contributing to massive government spending and helping to send inflation spiraling out of control in 2022.
Inflation of over 10% forced the Federal Reserve to hike interest rates at a historical clip, pushing up debt interest payments and fueling fears of a “death spiral.”
Dalio predicted that the “unprecedented levels” of debt across the world’s biggest countries is not sustainable.
“It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of [money and U.S. dollar] value,” Dalio said, adding he wants “to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin.”
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The bitcoin price has rocketed back over $100,000 per bitcoin, climbing as the Federal Reserve is … [+]
The gold price has surged along with bitcoin over recent months as traders and investors pile into scarce assets they’re betting will be immune to inflation.
“We believe bitcoin is meeting psychological resistance like 2020, when it hesitated to cross $20,000 at year-end but eventually broke through, doubling in price shortly after,” Alex Kuptsikevich, FxPro chief market analyst, said in emailed comments. “In this cycle, we see upside potential to $120,000 to $140,000 in the next couple of months before the next major shakeout.”
Tesla billionaire Elon Musk, after becoming a close advisor to U.S. president-elect Donald Trump, has recently led a campaign against government over spending, which he has blamed for soaring inflation.
Musk’s campaign against excessive U.S. spending resulted in the creation of the Doge department of government efficiency, which Musk has said he believes could strip $2 trillion from U.S. spending.
