Why Investors Are Losing Confidence in the US Dollar
The US Dollar (USD) has long been the main currency for global trade and debt settlement. But now, many investors are moving away from it. They prefer alternatives like Gold and Bitcoin (BTC). This change is due to the rising US debt, ongoing trade tariffs, and political uncertainty. These factors make the US Dollar less attractive and riskier for investors.
Rising US Debt Affects Dollar Trust
The US national debt hit $38 trillion by October 27, 2025, up from $24.71 trillion in 2015. Most of this debt, $30.28 trillion, is held by the public. Although the federal budget deficit slightly improved in 2025, the debt-to-GDP ratio is expected to rise from 99.9% to 102.2% in a year.
Experts warn that as debt grows faster than economic output, government spending will be pressured. This reduces funds for growth and raises risks for the US Dollar and its assets. Higher debt also pushes bond yields up.
Trade Tensions and Political Unrest
The US government has imposed tariffs on countries like China and India to reduce the trade deficit. Tariff revenue reached $158 billion in 2025 so far. However, these tariffs face legal challenges in the US Supreme Court. A ruling against them may force refunds and reset trade relations.
Political struggles also lead to a government shutdown since October 1, 2025. This shutdown is the second longest in US history. Moody’s downgraded the US credit rating to Aa1 in May 2025 due to rising debt and political instability.
What Is the ‘Debasement Trade’?
The “debasement trade” describes investors moving money from assets losing value to safer ones. This includes commodities like Gold and Silver, plus cryptocurrencies like Bitcoin. These assets serve as hedges against inflation and currency decline.
Rising Prices of Gold and Bitcoin
- Gold prices rose over 60% in 2025, trading above $4,000 per ounce as of October 24.
- Silver reached nearly $48 per ounce, up about 80% this year despite a recent drop from a record high.
- Large companies increased Bitcoin holdings, including Michael Saylor’s firm with 640,418 BTC valued at $74 billion.
- US Bitcoin ETFs by BlackRock and Fidelity hold over $100 billion combined, showing strong institutional interest.
Global Shift Away From the US Dollar
Countries are reducing dependence on the US Dollar to protect their economies. The BRICS group—Brazil, Russia, India, China, and South Africa—is working on de-dollarization. Russia now accepts local currencies for trade with China and India due to sanctions. These moves highlight a trend toward alternative currencies and digital money.
Experts’ Views on Debt, Gold, and Bitcoin
Ray Dalio’s Warning on US Debt
Ray Dalio, head of Bridgewater Associates, compares rising US debt to dangerous conditions before World War II. He says growing debt limits government spending and drives investors toward Gold and other safe assets.
Kenneth Griffin on Inflation and Dollar Decline
Kenneth Griffin, CEO of Citadel LLC, links inflation to the US Dollar losing 10% value in early 2025. He says many investors want to reduce risk tied to US debt by moving to Gold and Dollar alternatives.
Insights from Crypto Market Experts
Karim AbdelMawla from 21Shares explains that tokenized assets like US Treasury tokens and digital Gold give investors new ways to protect wealth. These digital products combine yield, stability, and inflation protection.
Jonathan Morgan of Stocktwits says growing US debt initially supports Treasury-backed stablecoins. But over time, rising debt may increase the appeal of Gold, Silver, and Bitcoin. He also notes recent crypto liquidations mainly affected traders using high leverage, not long-term holders.
Maartunn from CryptoQuant adds that rising debt pushes investors to assets governments cannot easily create, like Gold and Bitcoin. He sees recent sharp crypto price drops as short-term shocks, not a change in Bitcoin’s long-term safe-haven role.
Conclusion
The US Dollar faces challenges from high national debt,
