TechFlow News: On February 2, Chloe (@ChloeTalk1), a columnist for HTX DeepThink and researcher at HTX Research, analyzed that global markets experienced a rare and sharp “risk repricing” last week: gold, silver, and Bitcoin all plunged simultaneously—shattering the prior market consensus of “strong gold, stable crypto.” This was not merely a technical correction but a systemic shock triggered by a sudden shift in macroeconomic expectations, the concentrated unwinding of extremely crowded trades, and a rapid rebound in the U.S. dollar.
The core catalyst behind this volatility was a reassessment of the Federal Reserve’s future policy path. Market concerns over the “erosion of Fed independence, politicization of monetary policy, and systemic depreciation of the U.S. dollar”—heightened by former President Trump’s nomination of Kevin Warsh, a former Fed governor, as the next Fed Chair—have notably eased. Warsh is neither a pure technocrat nor an aggressive political mouthpiece: he served on the Federal Reserve Board from 2006 to 2011, participated directly in crisis-era decision-making, and has long been active in both Wall Street and policy advisory circles—giving him strong institutional and market credibility. His background has renewed market confidence that the Fed’s policy anchor and independence remain credibly constrained over the medium term.
As a result, the most crowded macro trade of recent months—“irreversible long-term easing + persistent weakening of dollar credibility”—has begun to be systematically reduced. The prior synchronized rally in gold, silver, and Bitcoin did not reflect solely rate-cut expectations; rather, it priced an extreme tail scenario: namely, that the Fed would continue easing indefinitely—even tolerating higher inflation—to accommodate fiscal and political objectives amid recurring inflationary pressures. Warsh’s emergence has significantly lowered the probability of this tail scenario. Even though actual policy has not yet changed, asset prices must now unwind the risk premium previously paid for this “worst-case outcome.”
Meanwhile, the U.S. Dollar Index surged sharply, posting its largest single-day gain since July last year—serving as the direct trigger suppressing precious metals and crypto assets. This does not imply markets are betting Warsh will immediately adopt a hawkish stance; rather, it reflects a reassessment of the “floor” for the Fed’s policy path over the next two to three years—from “potentially uncontrolled easing” back to a more restrained framework centered on fluctuations around the neutral interest rate.
In addition, concentrated positioning and leveraged risks amplified volatility. By late January, precious metals trading had become markedly “meme-ified,” with trend-following funds, leveraged long positions, and quantitative models highly concentrated—causing prices to deviate significantly from fundamentals. Once the macro narrative weakened, profit-taking, stop-losses, and margin calls triggered a cascade effect; silver’s historically large single-day move was thus no coincidence. Although Bitcoin’s fundamentals differ, its funding profile is highly correlated: the same cohort of “anti-dollar, anti-fiat” macro funds holds gold, silver, and Bitcoin concurrently—and was forced to reduce positions across all three assets amid the dollar’s rebound, placing downward pressure on crypto markets.
