Fed Chair Warsh Says Inflation Risks Have Come Down as Gold Surges Past $4,100

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In Today's Note

• Chipmakers weighed on the S&P 500 (-0.22%), AMD -6.89%, Micron -10.57%, but gold surged past $4,100/oz after Fed Chair Warsh said inflation risks have come down, while BTC consolidated in the $58K-$61K range amid continued spot ETF outflows.
• Europe's MiCA crypto framework is now fully in force, giving licensed firms a unified EU rulebook, while Robinhood launched its Layer 2 chain on mainnet with Uniswap and Metaplanet added 2,823 BTC in Q2 bringing its total to 43,000 BTC.

Market Snapshot: Overnight Moves

Macro & Markets

• Crypto, US equities and precious metals charted a different path in trading yesterday as profit-taking in large-cap semiconductor and chip stocks weighed on benchmark stock indices.
• The S&P 500 declined 0.22%, driven mostly by a slide in chipmakers: AMD declined 6.89%, NVDA fell 1.25%, Broadcom’s stock dropped 2.23%, while Micron Technology plunged 10.57%.
• Other sectors of the S&P 500 outperformed however, including financials and consumer discretionary. As such, the equal-weighted S&P 500 index session ended the day up 0.24%.

• BTC continued to consolidate in the $58K to $61K range we’ve seen it trade between since late June, after ending the month of June with its worst performance since June 2022.
• Sentiment was also dragged down by another day of spot Bitcoin exchange-traded funds outflows ($296M in withdrawals yesterday).

• Precious metals extended their rebound following remarks from Fed Chair Kevin Warsh which helped dampen speculation that the central bank may hike interest rates this year.
• Gold rose from $3,900/ oz to touch the $4,100/ oz mark while silver jumped over 5%.

• Speaking at the European Central Bank’s annual Forum in Portugal, Warsh said that inflation risks had come down in recent weeks, since he took over the helms of the central bank, “Expectations of inflation over the first four weeks of this period have come down, inflation risks have come down”. See that here:
• 2-year US treasury yields fell around 5bps following the comments, while the US Dollar Strength Index fell 0.2%. That drop in the 2Y yield helped drive a steepening in the 2s10s yield curve which has spent most of the year flattening.

• He also took the opportunity to reiterate the point he made in his June FOMC meeting regarding forward guidance. Asked specifically whether a rate hike is on the table at the July meeting, he responded that the panel moderator was “trying to get me to break this rule” on forswearing forward guidance and that “She’s going to fail.”
• The new chair confirmed that there will likely be new news on the five task forces he announced in the June meeting designed to cover different verticals of monetary policy.

• When asked about the Fed’s balance sheet, he said it’s “no secret” that he has in the past favoured a smaller portfolio, but any changes in the future would be an FOMC decision, and would be “well deliberated publicly, well understood, and will not be implemented until financial markets have come to understand what those are”.
• Adding to the balance sheet point, Warsh said, "It took us about 18 years to find our way into this big balance sheet, which again, in my biased view, borders on fiscal policy. I'm open-minded on the question – we're not going to prejudge it, but I want interest rate policy" to be the main tool used by the central bank.

• On the topic of central bank autonomy, Warsh said “We’ve been an independent central bank for a very long time. We’re going to be an independent central bank at this moment and you’re going to see no changes on that”.

• Meanwhile, on the geopolitical front, President Trump said that “very good” progress had been made in indirect talks with Iran through Qatari mediation.
• As part of the talks, the US is attempting to persuade Iran to abandon its proposed Strait of Hormuz transit fee mechanism to help put further downward pressure on crude oil prices, which currently trade just below $71 per barrel.
• Trump said that US negotiators Jared Kushner and Steve Witkoff have “had very good meetings, and we'll see. We hit them very hard for three nights, as you know, but we're getting along very well, so I call it the denuclearisation, and it's all taking place”.

DeFi / Web3 / Altcoins / Crypto

• Europe’s MiCA crypto framework is now fully in force, marking a major shift for digital asset regulation across the region.
• The regime gives licensed crypto firms a clearer path to operate across the EU under one unified rulebook, while companies that failed to secure authorization may face service restrictions, consolidation pressure, or market exits.
• Large licensed platforms such as Kraken, Coinbase, OKX, and Crypto.com are positioned to benefit, while Binance’s lack of MiCA approval stands out as a major setback.
• For users, the impact may be limited on major compliant exchanges, but the overall experience is likely to become more regulated, with stronger safeguards, additional checks, and less of the frictionless access that previously defined parts of the crypto market.

• President Donald Trump’s latest financial disclosure has intensified debate over ethics rules in pending crypto legislation.
• The filing showed substantial crypto-related income, prompting Democrats to renew calls for restrictions on how elected officials and their families can profit from digital assets while in office.
• Republican Sen. Cynthia Lummis said ethics provisions remain part of ongoing negotiations for the Clarity Act, which aims to establish a comprehensive federal framework for crypto markets.

• Robinhood has launched Robinhood Chain on public mainnet, marking a major step in its push to connect traditional finance with decentralized finance.
• The new Layer 2 network, built with Arbitrum’s technology, supports 24/7 stock token trading for eligible users and launched with partners including Uniswap.
• The company also introduced decentralized USDG lending through Robinhood Earn, expanded perpetual futures access in Europe, and confirmed plans to roll out crypto-focused Agentic Accounts for eligible U.S. traders.

• Metaplanet added 2,823 BTC in the second quarter, bringing its total bitcoin holdings to 43,000 BTC.
• The company spent approximately $222M during the quarter, at an average purchase price of about $78,608 per bitcoin.
• The latest acquisition marks a slower pace compared with previous quarters, though Metaplanet remains committed to its goal of holding 100,000 BTC by the end of 2026 and 210,000 BTC by the end of 2027.

• A new Solana-based prediction market platform called World has launched through the Phantom wallet, adding another competitor to the fast-growing prediction market sector.
• The platform aims to combine Solana’s high-speed blockchain infrastructure with Phantom’s large wallet user base, making onchain event trading more accessible without requiring a separate app or wallet setup.
• With Chainlink providing oracle support for faster resolutions and payouts, World is entering a market already led by Polymarket and Kalshi, as demand grows for platforms tied to sports, politics, financial events, and other real-world outcomes.

• Ark Invest purchased approximately $17.8M worth of Circle shares after the stock extended its recent decline.
• The firm added 287,609 shares across three ETFs as Circle fell 41% over the past month.

• American Bitcoin, a Bitcoin mining and treasury company established by Eric Trump and Donald Trump Jr. and majority-owned by Hut 8, said its 1-for-15 reverse stock split will take effect after market close on July 2, with Class A shares expected to begin trading on a split-adjusted basis on Nasdaq under ABTC on July 6.
• The split will consolidate every 15 Class A or Class B shares into one share, reducing total outstanding shares from about 1.09B to roughly 73M, while keeping the ticker, authorized share count and par value unchanged.
• The company said the reverse split is primarily intended to raise its per-share price to maintain compliance with Nasdaq’s $1 minimum bid requirement, after ABTC fell to around $0.64 and declined more than 64% year-to-date.

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