Bitunix Analyst: High interest rates are replacing war and becoming the new pricing core of the market

Mars Finance News, June 23—A clear change has started to emerge in global markets: geopolitical risks are still present, but the dominance of asset prices is gradually returning to monetary policy and liquidity conditions. The U.S.-Iran technical talks have officially kicked off in Switzerland. The U.S. has also issued a 60-day temporary license to allow Iran to resume oil sales, and the two sides have made progress on the Strait of Hormuz transit mechanism and the partial unfreezing of some assets. Concerns about disruptions to energy supply continue to ease. Qatar has also confirmed that the explosion at its natural gas plant was only an industrial accident and does not affect LNG exports, further strengthening expectations for supply recovery.

However, the market’s focus has increasingly shifted to the Federal Reserve. The impact from Waller’s first meeting since taking office is still unfolding. A latest report from Bank of America even expects the Fed could raise interest rates three times within the year, totaling 75 basis points. Meanwhile, within the Fed, reforms to reduce forward guidance are gaining support from more officials. Markets are starting to accept a future environment of lower monetary policy transparency and higher volatility.

This repricing has already shown up first in global asset markets. The U.S. dollar remains strong. After the yen again moved close to historic lows, it then saw sharp fluctuations. Emergency communications between Japan’s and the U.S.’s finance ministers also show that exchange-rate risks are heating up. On the other hand, overvalued growth assets are beginning to face pressure. SpaceX has fallen for the third consecutive trading day, with its market value dropping significantly from its peak. This reflects that as markets start recalculating funding costs, forward-looking growth stories no longer enjoy the valuation premium they once did.

For the crypto market, this means the source of risk is shifting. In the past few weeks, the market mainly priced in war, energy, and shipping risks. Now that the Middle East situation is gradually entering a negotiation framework, the market is refocusing on U.S. dollar liquidity, U.S. Treasury yields, and the Federal Reserve’s policy direction. If rate-hike expectations continue to heat up, capital will be more inclined to flow toward the U.S. dollar and high-yield fixed-income assets. For the crypto market to attract incremental capital again, it still needs to wait for a new turn in the liquidity environment.

In the short term, easing Middle East risks helps keep energy prices under control. But what truly affects the next phase of performance for risk assets is no longer whether the Strait of Hormuz is open—it is whether the market starts to believe the Federal Reserve will enter another rate-hike cycle. This also means that over the coming weeks, the core of market volatility will gradually shift from geopolitics to inflation data, employment data, and the Federal Reserve’s policy signals themselves.