U.S. inflation hit 3.5% in late 2025, fueling voter discontent with affordability. Ray Dalio highlights how this could swing 2026 midterms toward Democrats, potentially undoing Trump-era reforms. Such changes might ripple through crypto markets, affecting CeFi platforms and NFT trading.
Dalio's Warning on Political Shifts
Billionaire investor Ray Dalio, in his 2025 year-end review, noted that midterm elections often flip power due to unmet promises. He predicts Republicans could lose Congress if inflation persists, reversing current policies.
According to Phemex News, Dalio emphasizes the dollar's long-term decline, urging diversification beyond U.S. assets. This structural shift could boost alternatives like gold and crypto.
Impact on Centralized Finance (CeFi)
CeFi entities, such as major exchanges, thrived under Trump's deregulatory stance. A Democratic Congress might impose stricter oversight, curbing innovation in centralized trading systems.
Binance Square reports that pro-growth reversals could slow crypto adoption in traditional finance. Analysts see potential volatility for CeFi operations reliant on lenient U.S. rules.
NFT Market Vulnerabilities
NFTs, as digital assets, benefited from Trump's crypto-friendly policies promoting blockchain tech. Policy reversals might introduce taxes or regs that dampen NFT creation and sales.
Cointelegraph explains how inflation-driven voter shifts could lead to anti-crypto measures. This threatens NFT ecosystems built on centralized platforms.
Broader Economic Trends
Dalio forecasts real dollar returns lagging behind gold and non-U.S. assets. Crypto investors might pivot to decentralized options amid uncertainty.
Bitget News cites Dalio's call for diversification as U.S. equities underperform. This trend underscores risks for CeFi-heavy portfolios.
Quotes from Experts
'The balance of power tends to shift every two years because political parties typically overpromise and underdeliver,' states Ray Dalio via TradingView. This cycle amplifies midterm risks.
Wu Blockchain quotes Dalio:
The dollar
s decline is not just a short-term fluctuation but a long-term structural trend.' Such insights guide crypto strategies.
Strategies for Crypto Holders
Diversify holdings across CeFi and DeFi to mitigate policy risks. Monitor midterm polls for early signals of shifts.
Educate on NFT regulations to adapt quickly. Active management helps navigate potential reversals.
Relevance to Crypto Investors
These insights highlight how 2026 midterms could reshape CeFi and NFT landscapes under Trump policies. Staying informed empowers better decision-making in volatile markets.
