Bitcoin advocates argue for a neutral, permissionless monetary system and financial rails as an alternative to state-controlled tools like asset freezes and embargoes, suggesting fixed-supply digital assets could play a role in global finance.

Dalio notes a persistent prisoner’s dilemma among major powers that affects trade, technology, capital flows and military flashpoints, raising the risk of confrontation and costly wars.

In the near term, markets should expect volatility as geopolitics and liquidity shifts unfold, with gold and Bitcoin moving differently and spikes in VIX-crypto correlations during sell-offs.

During major wars, financial markets face heavy state control and uncertainty, with gold often serving as a primary medium of exchange when currencies weaken and capital controls tighten.

Historical parallels to the 1930s are drawn, including CBDC competition, cross-border sanctions, and reserve currency debates, with IMF data showing rising bilateral trade restrictions since 2021.

The crypto thesis hinges on distinguishing short-term trading conditions from a longer-term structural shift in how value is stored and transferred globally.

Dalio’s warning presents a dual-edged outlook: a compelling long-term opportunity for crypto amid potential turbulence and a shift in how people view crypto as a safe haven.

Investors are advised to reduce debt exposure and increase gold allocations as a hedge against war-related volatility, while noting that prudent fiscal management and stable relations can reduce the risk of large-scale conflict.

Sanctions, asset freezes, and expansive monetary policy are cited as drivers for demand for neutral, borderless money that doesn’t rely on a state-backed payments system.

Bitcoin and gold are presented as hedges against monetary expansion and state control, with crypto proponents urging permissionless, borderless money as a strategic asset.

Geopolitical risk analyses point to deglobalization, trade decoupling and financial fragmentation, including the weaponization of payment networks like SWIFT.

Dalio describes a shift toward great-power politics with sanctions and weaponized money, signaling a period of disorder where fiat confidence is eroded.