<div id="readability-page-1"><div><div><p>Author: Anthony J. Pompliano, Founder and CEO of Professional Capital Management; Translated by: Shaw &amp; Jinse Finance</p><p><strong>Gold, bonds, and Bitcoin are reflecting the true trends of the current financial markets.</strong> We have recently seen gold prices plummet to $4,100 per ounce, bond prices continue to rise, and Bitcoin has risen by about 8% since the outbreak of the conflict.</p><p>So why is all this happening? What future trends do these three asset classes foreshadow for us?</p><p>We can start with bonds. Over the years, trillions of dollars have flowed into the US Treasury market. U.S. Treasury bonds are highly attractive to investors due to their extremely high liquidity, near-zero credit risk, predictable returns, and tax advantages at the state and local levels. **Typically, during periods of heightened uncertainty, safe-haven demand drives up Treasury prices and suppresses yields.** This demand stems from investors' desire to avoid potentially large losses in stocks and corporate bonds. The U.S. government is widely regarded as the ultimate safety net for financial markets, thus Treasury bonds are considered the lowest-risk asset. **However, during the Iran conflict, the market reacted quite differently:** **Treasury yields rose, and prices fell.** This was due to a sharp rise in oil prices, which brought the typical risk of stagflation. **Stagflation risk made the Federal Reserve hesitant to cut interest rates, and inflation concerns resurfaced.** Inflation concerns altered investors' decision-making logic, preventing them from aggressively pushing up Treasury prices and suppressing yields. Since February 28, U.S. Treasury bonds have actually been one of the worst-performing major assets, completely contrary to conventional market logic. But what if this abnormal performance in the bond market is accompanied by a rare and extreme threat? What if buying U.S. Treasury bonds could invite a missile attack? This is not hypothetical. Last night, the Speaker of the Iranian Parliament posted a tweet with extremely strong language, which read as follows: &#34;Apart from military bases, all financial entities that fund the US military budget are legitimate targets. US Treasury bonds are stained with the blood of the Iranian people. Buying these bonds is tantamount to inviting attacks on your headquarters and assets. We are monitoring your investment portfolios. This is an ultimatum.&#34; How serious is this threat? I cannot judge. But the very idea that financial institutions could become targets of countries engaged in direct military conflict with the United States is unsettling. Will this statement deter people from buying US Treasury bonds? Probably not. But even more bizarre things have happened in history. This latest threat is just another example of Iran's strategy for dealing with the current conflict. They continue to launch missiles and drones at US military bases and energy facilities in several neighboring Middle Eastern countries, have blocked the Strait of Hormuz, and attacked numerous ships attempting to cross this dangerous waterway. And just this weekend, Iran also threatened to cut the undersea internet cable in the strait. This strategy reminds me of a long-circulated Reddit post explaining why you should never confront someone who has lost their temper: &#34;Never get into a fight with someone who is unpredictable, mentally unstable, or unreasonable. These people are often unrestrained and will use 'despicable' tactics to drag you down to their level, and you'll lose no matter what. They are more dangerous because they are unpredictable and fearless.&#34; This unpredictability, coupled with their intent to cause maximum destruction, has put the United States in an unusual position. We can stop bombing the country and declare victory at any time, but there's no guarantee that Iran will stop attacking its neighbors or abandon its nuclear weapons program. In such times of heightened uncertainty, gold prices should logically rise rapidly. Investors often turn to safe-haven assets, hoping to hedge against the risk of currency devaluation caused by financing war. But in this conflict, this is not the case. Gold prices have plummeted, falling approximately 13% since the conflict began. Some might attribute this sell-off to a potential Federal Reserve interest rate hike, but I disagree. I'm more inclined to believe that individuals, institutions, and nations in the Eastern world are facing a liquidity crisis. These are precisely the groups that have been buying gold heavily over the past two years. Therefore, with the dollar strengthening, these gold holders are likely selling their gold due to liquidity needs—the easiest way to raise cash. This brings us to Bitcoin. This cryptocurrency has become an overlooked winner in this conflict. Ash Crypto data shows that &#34;Bitcoin has risen 34% relative to gold in the 23 days since the outbreak of the US-Iran conflict.&#34; This strong performance is driven by multiple factors, but I genuinely believe the world is recognizing the allure of Bitcoin as a non-sovereign, decentralized asset—it can be transferred anywhere in the world in seconds. In the future we are about to enter, the appeal of a store of value that doesn't rely on air transport is self-evident. Therefore, before this war ends, my judgment is: oil prices will continue to rise, bonds and gold will remain under pressure, while Bitcoin will outperform other stores of value. This may not have been what investors expected before the conflict broke out, but it is the reality. Textbook theories cannot change the real market. Remember this: once the Iran war ends, financial markets will inevitably rebound sharply. The fact that President Trump told reporters late Friday that the US was about to gradually end the conflict, and the stock market rose almost instantly in after-hours trading, is clear evidence of this. So investors are now playing a gamble. How much drawdown are we willing to accept to bet on the Trump administration reaching a ceasefire? We all know that holding positions when the wind changes can yield substantial returns, but precise timing is almost impossible. This means you either have to accept portfolio drawdowns or stay out of the market and risk missing out on the rebound. Every investor has a different strategy. But one thing is undeniable… the movement of financial assets is being dictated by bombs in the Middle East, domestic oil prices, and tweets from the White House occupant. It's truly remarkable to live in this era.</p></div></div></div>

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<p>Gold, bonds, and Bitcoin are reflecting the true trends of the current financial markets. Gold prices have plummeted to $4,100 per ounce, while bond prices are rising, and Bitcoin has increased by about 8% since the conflict began. U.S. Treasury bonds, typically seen as safe, have performed poorly due to stagflation risks and threats from Iran. Gold prices have fallen approximately 13%, likely due to liquidity needs in the Eastern world. In contrast, Bitcoin has gained 34% relative to gold, highlighting its appeal as a decentralized asset amidst market turmoil.</p>

- The article discusses the current trends in gold, bonds, and Bitcoin amid geopolitical tensions, highlighting that gold prices have fallen and U.S. Treasury yields have risen contrary to expectations.  
- The author notes the unusual dynamics in the bond market due to inflation fears and a direct threat to financial institutions from Iran, which may impact investor behavior.  
- Furthermore, Bitcoin has emerged positively, gaining value as it is viewed as a decentralized asset, while the overall market is influenced by external factors such as military conflicts and oil prices.

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