Bitunix analyst: High interest rates are replacing war as the new core factor in market pricing

BlockBeats news, June 23, a significant change is beginning to emerge in global markets: while geopolitical risks persist, control over asset prices is gradually returning to monetary policy and liquidity conditions. Technical talks between the US and Iran have officially started in Switzerland. The United States has simultaneously issued a 60-day temporary license allowing Iran to resume oil sales, and both sides have made progress on the mechanism for transiting the Strait of Hormuz as well as on unfreezing certain assets. Market concerns over energy supply disruptions continue to diminish, with Qatar also confirming that the gas plant explosion was simply an industrial accident and will not affect LNG exports, further strengthening expectations of supply recovery.

However, the market’s focus has gradually shifted to the Federal Reserve. The shock brought by Waller’s first meeting as chairman is still fermenting, and the latest report from Bank of America even predicts that the Fed may raise interest rates three times this year, totalling 75 basis points. At the same time, more internal support has gathered for the Fed’s proposed reform to reduce forward guidance, with the market beginning to accept a new environment of less transparent monetary policy and increased volatility.

This repricing has already been reflected first in global asset markets. The US dollar remains strong, while the Japanese yen, after approaching historical lows again, experienced intense fluctuations. Emergency communications between the finance ministers of Japan and the United States also show that exchange rate risk is heating up. On the other hand, high-valuation growth assets are starting to feel the pressure. SpaceX has declined for three consecutive trading days, with its market capitalization falling sharply from its peak, reflecting that, as the market starts to recalculate funding costs, long-term growth stories no longer enjoy the valuation premium they once did.

For the crypto market, this means that the source of risk is shifting. In recent weeks, the primary trades in the market were about war, energy, and shipping risks. Now, as the Middle East situation gradually moves into a negotiation framework, the market is once again focusing on US dollar liquidity, US Treasury yields, and the Fed’s policy direction. If expectations for rate hikes continue to rise, capital will be more inclined to flow into the US dollar and high-yield fixed income assets. The crypto market, in order to re-attract marginal funds, still needs to wait for a new turning signal in the liquidity environment.

In the short term, the easing of Middle East risks will help suppress energy prices, but what truly determines the next stage in the performance of risk assets is no longer whether the Strait of Hormuz is open or not, but whether the market begins to believe the Fed will enter another rate hike cycle. This also means that, in the coming weeks, the core of market volatility will gradually shift from geopolitics to inflation data, employment data, and the Fed’s own policy signals.