Hawk Warsch has reshaped the markets: why bitcoin, gold, and SpaceX are falling, while bonds are rising
The market made a sharp reversal. The main driver for all risk assets suddenly became not geopolitics in the Middle East, but the hawkish rhetoric of new Fed Chairman Kevin Warsh. After his speech on June 17, the financial world instantly reassessed the outlook: the market not only removed hopes for a rate cut from prices but began actively pricing in a rate hike.
The US dollar has already updated its yearly high. The S&P 500 is confidently heading towards its fourth consecutive red weekly candle. Gold and silver are noticeably correcting, and SpaceX shares have even crashed 30% from their peaks. Money is now being hidden in government bonds — and there are good reasons for this.
Why Capital is Fleeing to Bonds
The logic is simple and harsh: when the cost of money rises, companies' future cash flows are discounted at a higher rate. This primarily hits the valuations of growth stocks, especially in the tech sector, which was heavily inflated by cheap credit. Capital senses such changes about a quarter in advance.
The fall in oil prices is not a reason for joy, but a clear symptom of an economic slowdown. For the Fed, lower commodity prices no longer offset stubbornly rising service prices. Gasoline in the country is getting cheaper, but services, insurance, and rent continue to rise. Core inflation has firmly entrenched itself, so the regulator is talking about hikes to suppress demand.
Factors of Asset Attractiveness
| Asset | Current Status | Investment Attractiveness |
| Bonds | Maximum yield in 10 years | High (guaranteed 2-3% above inflation) |
| Stocks (S&P 500) | Overheating and correction threat | Low (risk premium compressed to a minimum) |
| Gold | Lack of cash flow | Low (high opportunity cost) |
The main argument in favor of bonds is the positive real rate. The nominal yield on short and medium-term securities is at its highest in over a decade. Consequently, the real yield becomes anomalously attractive for large players. Reasoning that "it's better to earn in stocks" is a fatal mistake. Why take on the risk of a 20% correction in the S&P 500 when a risk-free instrument offers guaranteed profit?
Gold clearly loses out in this scheme for the same reason. The asset does not generate a stable cash flow. Therefore, when real yields rise, the opportunity cost of holding it becomes prohibitively high.
Additionally, the market is under pressure from the traditional end-of-quarter effect. Large funds need to lock in profits in overheated assets and show clients a stable result. The safest way to do this is to shift into fixed-income instruments.
The scenario of capital rotation is directly linked to the actions of Goldman and JP Morgan. JP Morgan itself needs to rebalance a $165 billion portfolio by June 30. This is why stocks, gold, and crypto are all falling simultaneously right now. The first thing to do in such a situation is to actively hedge with shorts.
Scenarios for Gold and Bitcoin
Over the next few months, I expect the Fed to maintain a pause. The first rate hike, if it happens at all, will occur no earlier than September. This means short-term yields will remain high, and capital will continue to flow into bonds. Metals, in my forecast, will trade in a range with downside risk. If the market believes in several rate hikes, gold could be pushed down to $3000. However, a crash is not expected due to constant purchases by global central banks.
For gold, I am not opening a short from current levels yet. Instead, I am waiting for a local bounce to gradually build a position:
- first entry into the market around $4250 (25% of position size);
- second zone for adding around $4400 (another 35% of position);
- final addition near the $4500 mark with signs of buyer weakness.
The level for a complete cancellation of the entire bearish scenario would be a price consolidation above $4600. I plan to take profits in stages.
For Bitcoin, the calculation relies entirely on the classic cyclical model. The key global cycle reversal typically occurs approximately 826 days after the halving. After that, it takes another 70 to 110 days to reach the main event. Relative to the current cycle, the 826-day zone falls at the end of July. Thus, the potential main bottom is expected in October–November in the range of approximately $50,000–55,000.
However, I do not expect the price to fall in one sharp move. A "bull trap" in July with a bounce to the $70,000 area is quite likely. My current tactical goal is to catch a long in the $58,000–58,500 zone. This would allow profiting from a move to $67,000–70,000, after which a new wave of decline towards autumn would begin.
Expert opinion: The market is in a classic "sell the fact" phase following the Fed's hawkish signal. Ignoring this macro factor is the main mistake of retail investors who continue to look for reasons for the decline in geopolitics. In current conditions, the priority is capital protection, not the pursuit of yield.