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From Bitcoin to bonds: How the Iran conflict is reshaping investment strategies

From Bitcoin to bonds: How the Iran conflict is reshaping investment strategies

The recent US military strikes on Iranian nuclear facilities, announced by President Donald Trump on Saturday, have thrust the ongoing Iran-Israel conflict into a new and dangerous phase, sending ripples of uncertainty through global markets. Investors, already grappling with mixed signals from US stock performance and upcoming economic indicators, are now forced to weigh the potential fallout of this unprecedented escalation.

In my view, this moment represents a critical juncture—not just for financial markets, but for the broader trajectory of global stability and economic health. Below, I’ll unpack the myriad factors at play, offering a detailed exploration of how these developments are shaping the world as we know it.

The geopolitical powder keg: US strikes and Iran’s retaliation

The announcement that the United States had directly entered the Iran-Israel conflict by launching attacks on three Iranian nuclear sites—Fordo, Natanz, and Isfahan—caught markets and analysts off guard. This operation, executed in coordination with Israel and involving over 125 aircraft and bunker-buster munitions, marks a significant departure from the US’s previous role as a diplomatic and indirect supporter in this regional standoff.

These strikes targeted key components of Iran’s nuclear program, a move that signals a bold escalation aimed at curbing Tehran’s nuclear ambitions. The immediate aftermath has been anything but reassuring. Iran responded swiftly with missile and drone attacks on Israeli cities, coupled with threats to target US military bases in the Gulf. This tit-for-tat retaliation has heightened fears of a broader conflict that could engulf the Middle East, a region already fraught with tension.

This escalation is a double-edged sword. On one hand, the US and Israel may view it as a necessary step to deter Iran’s nuclear progress, potentially stabilising the region in the long term by weakening a perceived threat. On the other hand, the immediate risk of miscalculation or overreaction could plunge the region—and by extension, the global economy—into chaos.

The Middle East is a linchpin for global oil markets, and any disruption here could send shockwaves far beyond its borders. As an observer, I can’t help but feel a sense of unease about how delicately balanced this situation is and how quickly it could spiral out of control depending on Iran’s next move.

Market reactions: A mixed bag of caution and resilience

The financial markets have responded to these developments with a blend of caution and measured resilience, reflecting the uncertainty that defines this moment. On Friday, before the US strikes were announced, US stock markets closed with mixed results: the Dow Jones Industrial Average eked out a modest gain of 0.08 per cent, while the S&P 500 and Nasdaq Composite slipped by 0.22 per cent and 0.51 per cent, respectively.

This uneven performance hints at investor hesitation even before the weekend’s bombshell news. By Monday, as the new trading week began, Asian equities opened lower, and US equity index futures pointed to a downward start for Wall Street, suggesting that the geopolitical shock is starting to weigh more heavily on global risk sentiment.

What strikes me here is the flight to safety that’s becoming evident in other asset classes. US Treasury yields, for instance, were mostly lower on Friday, with the 10-year yield dipping to 4.37 per cent and the 2-year yield falling to 3.90 per cent. This decline in yields—a drop of more than 1 basis point for the 10-year and over three basis points for the two-year—signals that investors are piling into government bonds, traditionally seen as a safe haven during times of uncertainty.

Gold, another classic refuge, held steady at US$3,368.68 per ounce, showing little movement, while Brent crude oil unexpectedly fell by 2.33 per cent to US$77.01 per barrel. The muted reaction in oil prices surprised me, given the Middle East’s critical role in global energy supplies. It suggests that, for now, investors aren’t pricing in a significant disruption, but that could change in an instant if the conflict intensifies.

Cryptocurrencies: A barometer of risk appetite

The cryptocurrency market, often a bellwether for risk appetite, has not been immune to the turbulence. Bitcoin, the world’s largest cryptocurrency by market value, took a sharp dive on Sunday, dropping 4.13 per cent to US$99,237 by mid-morning Eastern Time. Ether, the second-largest, fared even worse, plummeting 8.52 per cent to US$2,199. This sell-off sent Bitcoin below the psychological US$100,000 support level, a threshold that traders watch closely.

Popular trader Cas Abbe, in a post on X, warned that Bitcoin could slide further to the US$93,000–US$94,000 range before finding a bottom. The weakness didn’t stop with Bitcoin; it dragged other major altcoins, such as ETH, XRP, SOL, and HYPE, below their respective support levels, signalling a broader souring of sentiment in the cryptocurrency space.

Yet, there’s a glimmer of hope—or perhaps speculative optimism-in Bitcoin’s late-Sunday recovery, as it climbed back above US$101,000. To me, this rebound, alongside the modest moves in gold and subdued reactions in oil and equity futures, hints that some traders are betting on a contained conflict rather than a sustained geopolitical crisis.

Still, the volatility in cryptocurrencies underscores a broader risk-off mood. As someone who has closely followed these markets, I see this as a reflection of how intertwined digital assets have become with global events—once seen as a fringe phenomenon, they’re now a real-time gauge of investor sentiment.

Economic data: The next piece of the puzzle

Amid this geopolitical maelstrom, the US economic calendar is poised to deliver critical data that could either calm or inflame market jitters. Tonight, we’ll see the preliminary S&P Global US PMI readings for June, which measure the health of the manufacturing and service sectors, alongside existing home sales data for May, a key indicator of consumer confidence and the vitality of the housing market.

A strong PMI could signal that the US economy is holding up despite external pressures, potentially buoying investor confidence. Conversely, a weak reading might stoke fears of a slowdown, amplifying the uncertainty already swirling around the Iran-Israel conflict.

The housing data, meanwhile, offers a window into how American consumers are faring. A drop in existing home sales could suggest that high interest rates and economic uncertainty are eroding confidence, while a robust figure might counterbalance some of the geopolitical gloom.

Personally, I’m inclined to think these numbers will be pivotal—not just for markets, but for the Federal Reserve’s next moves, which I’ll explore shortly. In a world where every data point is scrutinised, tonight’s releases feel like a potential tipping point.

The Fed’s delicate dance: Rates, inflation, and oil

Speaking of the Federal Reserve, Fed Governor Christopher Waller’s recent comments have added another layer to this intricate narrative. On Friday, he noted that inflation was softening to a level where the Fed could contemplate cutting interest rates at its July meeting.

This dovish tilt sent US Treasury yields lower and contributed to a 0.20 per cent decline in the US Dollar Index to 98.71. For me, Waller’s remarks are a ray of light in an otherwise stormy outlook—lower rates could stimulate an economy facing headwinds from tariffs and now geopolitical risks. But here’s the catch: the Iran-Israel conflict could upend this calculus.

If the conflict disrupts oil supplies—say, through Iranian retaliation targeting Gulf infrastructure or the Strait of Hormuz—oil prices could surge. Analysts from JPMorgan have cautioned that an all-out conflict might push oil above US$100 per barrel, a level not seen since 2022.

Higher energy costs would act like a tax on consumers and businesses, potentially reigniting inflation just as the Fed hopes to tame it. In my view, this puts the Fed in a bind: cut rates to support growth and risk fueling inflation, or hold steady and risk choking an economy already under strain. It’s a tightrope walk, and the geopolitical wild card makes it all the more precarious.

The bigger picture: Global economic risks and opportunities

Zooming out, the implications of this conflict extend far beyond immediate market swings. The Middle East accounts for a substantial portion of global oil production, and any prolonged disruption could significantly impact economies that rely heavily on energy imports.

Higher oil prices would squeeze consumer spending, slow economic growth, and possibly tip the world into a stagflationary spiral, characterised by stagnant growth paired with rising prices. For the US, already navigating Trump’s tariff-driven economic policies, this could compound existing challenges, creating a perfect storm of inflationary pressures and reduced demand.

Yet, there’s a flip side. If the conflict de-escalates, perhaps through diplomatic breakthroughs or a mutual stand-down, markets could stabilise, and attention might shift back to economic fundamentals. A contained outcome could even spur long-term shifts, such as accelerated investments in renewable energy or alternative oil sources, thereby reducing dependence on the volatile Middle East.

I see both peril and potential here: the risk of a downturn is real, but so is the chance for resilience and adaptation if cooler heads prevail.

My take: A call for vigilance

In my opinion, we’re at a crossroads where vigilance is paramount. The US strikes on Iran have upped the ante, and while markets haven’t yet priced in a worst-case scenario, the potential for escalation looms large. Investors should keep a close eye on Iran’s response, tonight’s economic data, and the Fed’s July meeting.

For now, the flight to safety, into Treasuries and, to a lesser extent, gold, makes sense, but the muted oil reaction and Bitcoin’s partial recovery suggest a fragile hope that this won’t spiral out of control.

Personally, I’m torn. Part of me fears the domino effect of a broader conflict: higher oil prices, stalled growth, and a Fed with its hands tied. Another part wonders if this could be a catalyst for overdue shifts in global energy and geopolitical strategies.

Either way, the stakes are sky-high, and the coming days will tell us much about where this road leads. For investors and ordinary folks alike, staying informed and agile is the best defence against a world that feels increasingly unpredictable.

 

Source: https://e27.co/from-bitcoin-to-bonds-how-the-iran-conflict-is-reshaping-investment-strategies-20250623/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Gold falls from US$3,500, yield curve flattens: What’s next for commodities, Bitcoin and bonds?

Gold falls from US$3,500, yield curve flattens: What’s next for commodities, Bitcoin and bonds?

Treasury Secretary Scott Bessent’s comments on an expected de-escalation in the US-China tariff standoff, coupled with President Donald Trump’s confirmation that he will not seek to remove Federal Reserve Chair Jerome Powell, have injected a dose of stability into markets reeling from recent turbulence.

Meanwhile, equity markets, particularly in the US, Hong Kong, and Japan, have rallied on hopes of trade resolutions, with standout performances from companies like Tesla. In the foreign exchange markets, the US dollar has staged a rebound, while commodities like gold have pulled back from record highs, and the fixed-income market shows signs of a flattening yield curve.

These developments, set against the International Monetary Fund’s (IMF) warnings of slowing global growth due to US tariffs, paint a picture of an interconnected world navigating uncertainty with cautious hope. Below, I offer my perspective on these macroeconomic, equity, currency, commodity, and fixed-income trends, grounded in the latest data and market signals.

As articulated by Bessent, the prospect of de-escalating US-China trade tensions is a pivotal development that could reshape global markets. Bessent’s assertion that the current tariff standoff—marked by US tariffs on Chinese goods at 145 per cent and China’s retaliatory duties at 125 per cent—is “unsustainable” reflects a pragmatic recognition of the economic toll on both nations. His comments at a closed-door JPMorgan Chase investor summit sparked a 2.5 per cent surge in the S&P 500, signalling market relief at the possibility of reduced trade frictions.

However, skepticism from sources like Fox Business Network’s Charles Gasparino, who suggested Bessent’s optimism may be overstated, underscores the challenges ahead. As Bessent noted, negotiations with China are likely to be a “slog,” with no formal talks yet underway. The US-China trade war has already disrupted global supply chains, fuelled inflation, and contributed to the IMF’s downward revision of global growth to 2.8 per cent for 2024 and US growth to 1.8 per cent for 2025.

A de-escalation could alleviate some of these pressures, but the path forward is complex. China’s vow to “fight until the end” and its recent 84 per cent tariffs on US goods suggest a hardline stance, though Bessent argues China holds a “losing hand” due to its export-heavy reliance on the US market.

I am cautiously optimistic: while both sides have incentives to negotiate—China to protect its export-driven economy and the US to curb inflation and market volatility—the entrenched positions and domestic political pressures on both leaders could delay meaningful progress. As noted by Politico, the White House’s reported progress on trade deals with Japan and India offers a potential blueprint for bilateral resolutions that could ease global trade tensions if applied to China.

Trump’s decision to retain Federal Reserve Chair Jerome Powell is a stabilising force for markets, particularly after months of public criticism from the president. Trump’s earlier calls for Powell to cut interest rates aggressively, including a social media post demanding, “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS,” had raised fears of political interference in monetary policy.

His confirmation that he has “no intention of firing” Powell, reported by Reuters, has calmed investor concerns about central bank independence, a cornerstone of US economic stability. Powell’s tenure has been marked by a cautious approach to inflation, which recently fell to 2.4 per cent in March 2025, below expectations of 2.6 per cent. This data, combined with Trump’s softened rhetoric, suggests the Federal Reserve can continue its data-driven approach without the spectre of political upheaval.

However, the IMF’s warning that US tariffs could reignite inflationary pressures complicates the Fed’s path. My take is that Powell’s retention is a net positive for markets, as it preserves institutional continuity and reduces the risk of abrupt policy shifts. Yet, Trump’s ongoing pressure for lower rates could create friction, especially if tariff-induced inflation forces the Fed to maintain or raise rates, potentially clashing with the administration’s growth agenda.

The US has seen a robust rebound in the equity markets, driven by optimism over trade negotiations and Bessent’s comments. The S&P 500’s 2.5 per cent climb, the Nasdaq 100’s 2.6 per cent rise, and the Dow’s 1,000-point gain reflect a market eager for positive signals amid recent volatility. The Cboe VIX Index, a measure of market fear, remains elevated at 31, indicating lingering uncertainty, but the rally suggests investors are betting on a softer US trade stance.

Tesla’s five per cent stock surge, fueled by renewed confidence in CEO Elon Musk’s focus on the company, is a standout. As a business leader and a vocal supporter of Trump’s policies, Musk’s influence has amplified Tesla’s market narrative, particularly as tariffs on Chinese electric vehicles could bolster domestic producers. In Hong Kong, the Hang Seng Index’s 0.8 per cent rise to 21,562, supported by China’s “national team” and retail investors, reflects resilience despite tariff pressures.

Japan’s Nikkei 225 and Topix indices, up over two per cent have been buoyed by Wall Street’s rebound and signals of easing US-China tensions and Japan’s private sector growth. In my opinion, these equity gains are fragile, hinging on the success of trade negotiations.

The IMF’s downgraded growth forecasts for the US, Mexico, China, and the Eurozone serve as a reminder that tariffs have already inflicted economic damage, and any misstep in diplomacy could reverse these gains. Investors should remain vigilant, as the market’s optimism may outpace the reality of protracted trade talks.

The foreign exchange market has seen a notable rebound in the US dollar, with the DXY index nearing 99.5, while the euro has slipped below 1.14. This dollar strength is likely driven by renewed confidence in US economic stability following Trump’s Powell decision and Bessent’s de-escalation comments. The dollar’s earlier 5.8 per cent decline in 2025, as reported by Reuters, reflected fears that tariffs would undermine US growth. Still, the rally suggests markets are reassessing the US as a relative safe haven.

The euro’s weakness, meanwhile, stems from the Eurozone’s exposure to US tariffs and internal divisions over retaliation strategies, with countries like France advocating for aggressive countermeasures and others, like Ireland, favouring restraint. The dollar’s rebound is temporary, as tariff-related uncertainties and global growth concerns could cap its upside. The euro’s decline may persist if the European Union fails to present a unified front, but a successful negotiation with the US could stabilise the currency.

In commodities, gold’s retreat from a record high of US$3,500, as reported by Reuters, reflects a shift away from safe-haven assets as trade tensions ease. Gold’s 1.5 per cent decline on April 22, 2025, aligns with the equity market’s rally and the dollar’s strength, though its earlier surge to US$3,167.50 amid tariff fears underscores its role as a hedge against uncertainty.

Canada’s industrial producer prices, up 0.5 per cent in March 2025, driven by non-ferrous metals and wood products, highlight commodity-specific dynamics, though falling energy prices, particularly diesel, signal demand concerns. Gold’s pullback is a healthy correction, but its long-term trajectory remains upward given persistent geopolitical risks and inflationary pressures from tariffs. Investors should monitor commodity trends closely, as they offer insights into global demand and trade dynamics.

The fixed-income market’s flattening yield curve, particularly around the stable 5-year sector, is a critical signal of market expectations. The 10-year Treasury yield’s slight easing to 4.3949 per cent, as reported by Reuters, reflects concerns about slower growth, though tariff-induced inflation fears drove earlier spikes to 4.06 per cent.

A flattening yield curve often precedes economic slowdowns, and the IMF’s growth warnings reinforce this narrative. The current yield curve reflects a market grappling with mixed signals: optimism about trade de-escalation versus fears of tariff-driven inflation and recession. Fixed-income investors should remain cautious, as the Fed’s next moves will hinge on inflation data and trade outcomes.

Cryptocurrencies, meanwhile, have mirrored equity market optimism, with Bitcoin hovering around US$92,800 after a 9.75 per cent rally, eyeing a US$95,000 target. Ethereum’s 11.19 per cent surge to US$1,780 and Ripple’s recovery suggest a broader risk-on sentiment.

The Relative Strength Index (RSI) for both Bitcoin (65) and Ethereum (54) indicates bullish momentum, but potential support levels at US$85,000 for Bitcoin and US$1,700 for Ethereum warrant caution. I think crypto’s rally is tied to broader market dynamics, particularly the dollar’s movements and trade optimism, but its volatility demands careful risk management.

In conclusion, the global economy stands at a crossroads, with Bessent’s de-escalation hopes and Trump’s Powell decision offering a reprieve from recent turmoil. Equity markets, currencies, commodities, and fixed-income trends reflect a delicate balance of optimism and caution. While markets have rallied on positive signals, the IMF’s growth warnings and the complexity of US-China negotiations suggest that volatility will persist.

My outlook is guarded optimism: progress on trade and monetary policy stability could pave the way for recovery, but investors must brace for bumps along the road. The interplay of these factors will shape the economic narrative for the remainder of 2025, and staying informed will be key to navigating this dynamic landscape.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Gold is winning bonds, stocks and maybe Bitcoin: What to invest?

Gold is winning bonds, stocks and maybe Bitcoin: What to invest?

The global financial markets are grappling with a sharp retreat in risk sentiment, driven by escalating tensions between the US administration and the Federal Reserve, alongside uncertainties surrounding trade policies and tariffs. President Donald Trump’s latest social media salvo, urging Federal Reserve Chairman Jerome Powell to slash interest rates due to “virtually no inflation,” has reignited concerns about the central bank’s independence.

Trump’s pointed criticism, accusing Powell of being “too late” except during the election period, has rattled investors, leading to a broad sell-off in US assets on Monday. The S&P 500 plummeted 2.4 per cent, with the so-called Magnificent Seven—comprising tech giants like Apple, Microsoft, and Nvidia—underperforming the broader index with a 3.2 per cent decline.

Meanwhile, the US Treasury yield curve steepened, with front-end yields dipping and long-end yields climbing, reflecting shifting expectations about monetary policy and economic growth. The US Dollar Index slid 0.9 per cent to 98.38, its lowest in three years, while commodities displayed mixed responses: Brent crude fell 2.5 per cent amid risk-off sentiment, and gold surged 2.9 per cent to a record high above US$3,400 per ounce as investors sought safe-haven assets.

In Asia, China’s commerce ministry issued a stern warning against nations striking trade deals with the US at its expense, promising “resolute and reciprocal” countermeasures, further clouding the global trade outlook. Against this backdrop, Bitcoin’s remarkable surge past US$87,700 has captured attention, fuelled by a weakening dollar, speculation around US Treasury buybacks, and growing institutional interest. As markets navigate these turbulent waters, the interplay of macroeconomic forces, geopolitical tensions, and cryptocurrency dynamics is shaping a complex landscape for investors.

The friction between the White House and the Federal Reserve is a central driver of the current market unease. Trump’s public demands for lower interest rates, coupled with his pointed attacks on Powell, have raised alarms about potential political interference in monetary policy. The Federal Reserve’s independence is a cornerstone of its credibility, allowing it to make data-driven decisions to balance inflation and growth without succumbing to short-term political pressures.

However, Trump’s rhetoric, including threats to influence or even replace Powell, has sparked fears that this independence could be eroded. Such concerns are not merely academic; they have tangible market implications. Investors rely on the Fed’s predictability and autonomy to anchor expectations about interest rates and economic stability. Any perceived threat to this framework can trigger volatility, as seen in Monday’s sharp declines across US equity markets.

The S&P 500’s 2.4 per cent drop reflects a broader reassessment of risk, with the Magnificent Seven’s steeper 3.2 per cent decline signalling particular vulnerability in high-valuation tech stocks, which have been market darlings in recent years. These companies, heavily weighted in major indices, are sensitive to shifts in interest rate expectations and economic uncertainty, both of which are now amplified by the Fed-White House clash.

The US Treasuries market provides further insight into investor sentiment. The yield curve’s steepening—characterised by a 3.6 basis point drop in the 2-year yield to 3.762 per cent and an 8.6 basis point rise in the 10-year yield to 4.410 per cent—suggests a divergence in expectations for short-term and long-term economic conditions.

The decline in front-end yields indicates that some investors anticipate the Fed may resist immediate rate cuts, possibly due to inflationary pressures from tariffs or other policy shifts. Conversely, the uptick in long-end yields reflects concerns about sustained economic growth and potential inflation, particularly if trade disruptions intensify. This steepening curve is a classic signal of market unease, as it implies that investors are demanding higher compensation for holding longer-dated debt amid uncertainty.

The US Dollar Index’s slide to a three-year low of 98.38 underscores the broader retreat from US assets, as a weaker dollar often accompanies diminished confidence in US economic leadership or policy coherence. This dynamic has also bolstered gold’s appeal, with its 2.9 per cent surge to above US$3,400 per ounce reflecting a flight to safety amid geopolitical and economic turbulence.

Commodities markets are equally telling. Brent crude’s 2.5 per cent decline to US$66.26 per barrel highlights the risk-off sentiment gripping investors, as fears of a global economic slowdown—potentially exacerbated by trade wars—dampen demand expectations for oil. China’s commerce ministry’s vow to counter any trade deals that disadvantage Beijing has heightened these concerns, signalling that the US-China trade rift could deepen.

The ministry’s statement, promising “resolute and reciprocal” measures, suggests that retaliatory tariffs or other trade barriers are on the horizon, which could further disrupt global supply chains and economic growth. Asian equity indices, which initially gained but later reversed course, reflect the region’s sensitivity to these developments, given China’s pivotal role in global trade. The interplay of these factors underscores the interconnectedness of global markets, where US policy decisions reverberate far beyond its borders.

Amid this macroeconomic turmoil, Bitcoin’s meteoric rise stands out as a counterpoint, driven by a confluence of factors that highlight its growing role as an alternative asset. The cryptocurrency briefly surpassed US$87,700, buoyed by a weakening US dollar and speculation about US Treasury buybacks. Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, has framed these buybacks as a potential “bazooka” for Bitcoin’s price, arguing that they could inject significant liquidity into financial markets.

By repurchasing its own debt, the Treasury could effectively ease monetary conditions, even if the Fed maintains its current stance on interest rates. This liquidity influx could amplify demand for risk assets like Bitcoin, which thrives in environments of monetary expansion. Hayes’ prediction that this may be the “last chance” to buy Bitcoin below US$100,000 reflects his bullish outlook, grounded in the belief that structural shifts in monetary policy and market dynamics are aligning in Bitcoin’s favor.

Adding to this narrative is a new analysis linking Bitcoin’s price movements to the global M2 money supply, a broad measure of money circulating in the economy. This predictive offset model suggests that Bitcoin’s trajectory closely tracks global liquidity trends, with historical patterns indicating a potential climb above US$100,000 if current conditions persist.

Such analyses resonate with investors who view Bitcoin as a hedge against currency debasement and inflationary policies, particularly in an era of unprecedented government spending and debt issuance. The weakening US dollar, down 0.9 per cent on Monday, further enhances Bitcoin’s appeal, as a depreciating currency often drives demand for assets perceived as stores of value. Gold’s concurrent surge underscores this trend, as both assets benefit from safe-haven flows amid uncertainty.

Institutional adoption is another critical driver of Bitcoin’s rally. Fidelity and Bitwise’s recent US$133 million investment in Bitcoin signals robust confidence from major players, whose involvement often lends legitimacy and liquidity to the cryptocurrency market. Similarly, BlackRock’s Bitcoin ETF reported a US$41.6 million daily inflow, reflecting heightened investor interest. These inflows are significant not only for their size but also for their symbolic weight, as institutional participation tends to stabilise and amplify Bitcoin’s price movements.

The growing acceptance of Bitcoin ETFs, as evidenced by data from platforms like farside.co.uk, suggests that traditional investors are increasingly comfortable allocating capital to cryptocurrencies, viewing them as a diversification tool in volatile markets. This trend could have lasting implications, potentially smoothing Bitcoin’s historically wild price swings while attracting a broader investor base.

From my angle, the current market environment is a crucible of competing forces, where traditional assets are buffeted by policy uncertainties, and alternative assets like Bitcoin are seizing the moment. The tensions between the US administration and the Federal Reserve are a stark reminder of the delicate balance between political ambition and economic stability.

Trump’s push for lower interest rates, while politically expedient, risks undermining the Fed’s credibility and could lead to longer-term inflationary pressures, particularly if tariffs disrupt global trade. The market’s reaction—evident in the S&P 500’s decline, the dollar’s weakness, and gold’s surge—reflects a rational response to these risks, as investors recalibrate their expectations for growth and stability.

Bitcoin’s ascent, meanwhile, is both a symptom and a signal of deeper shifts. Its correlation with global liquidity trends, as highlighted by the M2 analysis, suggests that it is increasingly integrated into the broader financial system, no longer a fringe asset but a barometer of monetary conditions.

The involvement of institutions like Fidelity, Bitwise, and BlackRock reinforces this view, pointing to a future where cryptocurrencies play a central role in portfolio construction. However, Bitcoin’s volatility remains a double-edged sword; while it offers outsized returns in bullish phases, its susceptibility to sharp corrections warrants caution.

Looking ahead, the interplay of US monetary policy, trade dynamics, and cryptocurrency adoption will shape the investment landscape. Investors must navigate a world where traditional safe havens like Treasuries are under pressure, and alternative assets are gaining prominence.

The US equity markets’ implied higher open today suggests a potential rebound, but sustained recovery will hinge on clarity around Fed policy and trade negotiations. For now, the markets remain on edge, caught between the promise of innovation and the perils of uncertainty.

 

Source: https://e27.co/gold-is-winning-bonds-stocks-and-maybe-bitcoin-what-to-invest-20250422/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j