Gold, Silver, Bitcoin (BTC), Facing Simultaneous Collapse... Blame Hawkish Warsh?

▲ Gold, Silver, Bitcoin (BTC)/ChatGPT generated image

As gold, silver, and Bitcoin (BTC) simultaneously surrendered key price levels and wavered, the market's arrows are pointing towards the Federal Reserve (Fed) under Kevin Warsh.

According to financial media outlet MarketWatch on June 24 (local time), the so-called "debasement trade," which bet on a decline in dollar value, has been rapidly collapsing over the past week. MarketWatch reported that a strong dollar and fears of interest rate hikes are pressuring gold, silver, and Bitcoin.

According to FactSet data, gold fell below $4,000 per ounce for the first time in seven months. Silver also dropped below the $60 per ounce mark during a similar period. Bitcoin slid below $60,000 for the first time since late 2024.

MarketWatch identified Federal Reserve Chairman Kevin Warsh as a key factor in the current sell-off. The analysis suggests that as expectations for a benchmark interest rate hike intensified by the end of this year, selling pressure was concentrated on non-yielding assets like gold and silver, and on Bitcoin, which also carries characteristics of a risk asset.

A strong dollar was also cited as a factor amplifying the decline. The article reported that investors are moving out of precious metals and cryptocurrencies, and are focusing on semiconductor and memory chip-related stocks as new momentum trades.

As gold, silver, and Bitcoin successively lost their psychological support levels, the market began to re-evaluate the sustainability of the debasement trade. As long as Warsh's Federal Reserve maintains its signal for interest rate hikes, a strong dollar and asset price adjustment pressures are expected to remain key market variables for the time being.

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