The Fed's hawkish pivot: why bitcoin, gold, and SpaceX are falling simultaneously while capital flees to bonds
The main driver for all risk assets has sharply changed. Geopolitics in the Middle East has been replaced by a hard pivot in the rhetoric of the Federal Reserve. After the new Fed Chairman Kevin Warsh took a hawkish stance on June 17, the financial world instantly realigned. The market not only erased the chances of a rate cut from its quotes but began actively pricing in a rate hike.
Analyst Coin22 notes that the US dollar has already updated its annual high. The S&P 500 index is steadily moving toward its fourth consecutive red weekly candle. Gold and silver are noticeably correcting, and SpaceX shares have even crashed 30% from their peaks. Capital is now flowing into government bonds, and this trend, in my observation, will only intensify.
Why Capital Is Fleeing to Bonds
The logic of this movement is built on a rapid reassessment of market risks. When the cost of money rises, future cash flows of companies are discounted at a higher rate. This primarily hits the valuations of growth stocks, especially in the technology sector, which was heavily inflated on cheap credit. Capital senses such changes about a quarter in advance.
The analyst interprets the drop in oil prices quite uniquely. For him, this is not a reason for joy, but a clear symptom of an economic slowdown. In his view, for the Fed, lower commodity prices no longer offset stubborn growth in service prices. Gasoline in the country is getting cheaper, but services, insurance, and rent continue to rise rapidly. Consequently, core inflation has firmly taken hold, which is why 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. Accordingly, the real yield becomes anomalously attractive for large players. Arguments about it being better to earn in stocks are a common 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 analyst points to 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. He links the rotation scenario to the actions of Goldman and JP Morgan. JP Morgan itself needs to rebalance its portfolio by $165 billion by June 30. That is precisely why stocks, gold, and crypto are all falling simultaneously. 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 come no earlier than September. This means yields on short-term securities will remain high, and capital will continue to flow into bonds. Metals, in my forecast, will trade in a range with a risk of decline. If the market believes in several rate hikes, gold could be pushed down to $3000. However, a crash is not expected due to ongoing purchases by global central banks.
For gold, Coin22 is not yet opening a short from current levels. Instead, he is waiting for a local bounce to gradually build a position: the first entry into the market around $4250 (25% of the position size); the second zone for adding around $4400 (another 35% of the size); the final addition near the $4500 mark if there are signs of buyer weakness. The level for a complete cancellation of the entire bearish scenario would be a price consolidation above $4600. The investor plans to lock in profits in stages.
For bitcoin, the calculation relies entirely on the classic cyclical model. The key reversal of the global cycle typically occurs approximately 826 days after the halving. After that, it takes another 70 to 110 days to reach the main bottom. In relation 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 would begin toward autumn.
My comment: The market is undergoing a fundamental paradigm shift. The era of "cheap money" is over, and investors are forced to reassess their portfolios under tight monetary policy. As long as bond yields remain attractive, risk assets, including bitcoin, will remain under pressure. The key signal for a reversal is not geopolitics, but a change in the Fed's rhetoric, which we will likely see no earlier than autumn.