- Expectations for a peace agreement between the US and Iran are driving fresh inflows into bonds, Asian stocks, and some risk assets.
- Bitcoin (BTC) has rebounded from its lowest level since Trump’s election victory, but at about 48%% below its all-time high, it is still too early to call it a full trend recovery.
- In the altcoin market, limited buying is flowing into crypto-AI names, while a final peace agreement and whether dollar weakness persists are key factors in determining whether the rebound can continue.
Forecast Trend Report by Period
Expectations for a peace agreement between the US and Iran are prompting global hedge funds to shift back toward investment strategies they used before the war. Hopes that surging oil prices and inflation fears may ease are drawing money back into bonds, Asian stocks and some other risk assets.
Bloomberg reported on June 15 that hedge fund managers see a potential US-Iran peace deal as a catalyst that could reduce the risk of oil supply disruptions, ease pressure for further dollar strength and revive appetite for risk assets. Gray Value Management in Florida and Reed Capital Partners in Singapore favor short-term US Treasuries, while some managers are also eyeing the yen and Southeast Asian equities.
Thomas Hayes, chairman of Great Hill Capital, said the priority is to return to the strategies that worked in January and February before the war if an agreement brings down inflation expectations. A recovery in consumer sentiment could also create a buying opportunity in US consumer stocks, he added.
The cryptocurrency market is also trying to rebound on hopes that geopolitical risks will ease. Bitcoin has recovered to near its highest level in about two weeks after recently falling to its lowest level since Donald Trump’s 2024 election victory. Even so, it remains about 48% below the all-time high reached in October last year, suggesting it is too early to declare a broader recovery in market trend.
In the altcoin market, limited buying has been concentrated in crypto-AI-related tokens. Richard Galvin, chairman of DACM, said he put part of his cash holdings into digital assets over the weekend, mostly into crypto-AI projects. He added that he remains somewhat cautious because Iran and the US have not yet signed a final peace agreement.
Investors are now watching whether the rebound amounts to no more than a relief rally or develops into a broader recovery in flows across risk assets. A reduction in war risk could ease concerns about oil and inflation and lessen the pressure on central banks to keep policy tight. Until a final agreement is signed, however, investors are unlikely to materially increase leverage.
In bond markets, demand remains concentrated in short-dated debt. Steven Gray, chief investment officer at Gray Value Management, said there is little reason to stretch for yield by moving into longer maturities or lower-rated credit if the 10-year Treasury offers only about 40 basis points more than the 2-year note. Bloomberg said the 2-year US Treasury yield fell to 4.02%, while the 10-year yield declined to 4.43%.
The prospect of a weaker dollar is also supportive for risk assets. If geopolitical tensions ease, demand for the dollar as a haven could fade, allowing some capital to move into emerging-market currencies and Asian assets. Gerald Goh, chief investment officer at Reed Capital, said he is buying the yen on the view that the dollar may be overvalued and that Japan’s currency could be structurally improving.
Markets are focused on three factors in judging whether the altcoin rebound can last: whether a final peace agreement is signed, how strongly Bitcoin recovers and whether dollar weakness persists. Easing war risk is giving broader risk assets some breathing room, but the crypto market remains defensive, with selective buying first emerging in themes such as crypto-AI.