Why Gold, Silver, and Bitcoin Dropped After Trump’s New Fed Chair Spoke in 2026
What the Fed’s latest direction could mean for gold, silver, Bitcoin, and the broader market.
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Jul 05, 2026
President Trump’s new Fed chair recently finished his first meeting, and his announcements caused money to change overnight.
Gold prices crashed to under $4,000 for the first time in months.
Silver prices crashed even harder than that, and Bitcoin prices fell off a cliff.
This is where everybody is pointing their fingers at Kevin Worsh’s new economic plan as the trigger for the gold, silver, and Bitcoin crash. But that’s not the full story.
Kevin Worsh is the chairman of the Federal Reserve Bank of the United States. And the Federal Reserve Bank has two jobs.
No 1: Their job is to maximize the job market, meaning keeping unemployment low.
Their other job is to keep inflation under control. And the way that the Fed does this is by managing and controlling two things.
- The first thing the Federal Reserve Bank controls is interest rates.
- The other thing that the Federal Reserve Bank controls is the dollar, specifically, money printing and how much money is floating around in the United States economy.
So when the Federal Reserve Bank sees that the job market is struggling, the economy is struggling, what the Federal Reserve Bank will do is they will cut interest rates and print money.
In other words, they will stimulate the economy. When interest rates go down, mortgage rates go down, car loan rates go down, and people start spending money again.
When people start spending money again, realtors get more commission checks, mortgage bankers get more commission checks, and title companies get more commission checks, so the economy starts to move, which helps improve the job market.
On the flip side, when inflation is a problem, as we saw after the pandemic, the Federal Reserve Bank will then raise interest rates.
That raising of interest rates means people spend less money because they’re borrowing less money. And that helps to cool down the economy, to cool down inflation.
But it’s very difficult for the Federal Reserve Bank to do these two things at the same time because you can’t cut interest rates and raise interest rates at the same time.
You can only pick one. And this is the dilemma that the Federal Reserve Bank has been dealing with. And Kevin Worsh made an announcement that shocked a lot of people on Wall Street.
Ever since President Trump entered the White House, he has been promising and demanding lower interest rates in the United States.
The tricky part about this is that although it’s called the Federal Reserve Bank,
- It’s not a bank because you and I can’t go there and deposit money.
- It’s not a reserve because it’s not sitting on any cash reserves.
- It’s not federal because it’s not a part of the Federal Government, which means President Trump cannot tell the Federal Reserve Bank what to do. But in May 2026, this is what everybody was counting down to. President Trump was able to appoint a new chairman at the Federal Reserve Bank because the previous chairman’s term expired. So, the president couldn’t tell the Fed to cut interest rates. Instead, he was finally able to appoint the new chairman of the Federal Reserve Bank, Kevin Worsh.
And this is where everybody thought and hoped that Kevin Worsh was going to come in and cut interest rates aggressively because that’s what President Trump wanted. But immediately after Kevin Worsh gave his first speech, as the new chairman at the Federal Reserve Bank, the economy and investors realized he’s not going to do what President Trump wants. And that shocked the gold market, the silver market, and the Bitcoin market.
What did he say? The first thing that Kevin Worsh said is that right now, we’re not going to cut interest rates.
We’re going to keep interest rates where they are. Which was not too big of a shock for Wall Street because people kind of expected that.
But what he said next is what caused that big sell-off in gold, silver, and Bitcoin.
Well, that probably will not be happening. In fact, we might actually be raising interest rates before the year ends in 2026.
So, people were hoping that Kevin Worsh was going to come in and cut interest rates as a way to boost the economy.
That’s what Wall Street was hoping for. Instead, he said, “No, I’m not planning on cutting interest rates. We’re actually now looking at raising interest rates, making borrowing more expensive, which could now hurt the economy as a way to bring inflation down. This is what caused the big sell-off in gold, silver, and Bitcoin.”
Now, you’re going to say, “Well, why did this decision start that selloff? And what else contributed to the sell-off in gold, silver, and Bitcoin?” Because this is where things get very important and interesting for you to understand as an investor.
By the way, these changes by the Federal Reserve Bank move money. And when money moves, it creates an investment opportunity.
You have to take a step back and understand why the Federal Reserve Bank is drastically changing its strategy on how to fix the economy in 2026.
These higher oil prices then contributed to a lot of inflation in the economy. Why? Because the higher oil prices led to higher gas prices. It led to higher diesel prices.
It led to higher shipping costs, higher travel costs, higher grocery costs, and higher fertilizer costs, which meant that the prices of pretty much everything went up.
Now, even today, even though oil prices have come down significantly, the price has not come down. Gas prices are still higher, diesel prices are still higher, and so we haven’t seen that relief with inflation.
And this is where Kevin Worsh is saying we have to take a look at the two problems in the economy.
We have pain in the job market. We have pain with inflation. And Kevin Worsh is saying my concerns, this is the Fed, my concerns are more about inflation and the dollar because if we do not tame inflation and the dollar today, it’s going to pose much bigger concerns for our economy in the future.
The reason why this is important for you to understand is that now you want to understand why gold, silver, and Bitcoin took such a hit. And there are three main reasons why.
The idea that the dollar is going to collapse, the idea that the dollar is going to lose value, the idea that the dollar is going to be weakened because of inflation, all of these things have been huge concerns for many years.
And because people were concerned about the dollar collapsing essentially, they were turning to these other debasement assets, things like gold, things like silver, things like Bitcoin to protect themselves against the dollar losing value.
But this is where Kevin Worsh came in and said, “I’m not going to listen to what President Trump wants. I don’t want to make a weaker dollar. I want to strengthen the United States dollar. I want to bring back the strength to the American currency.” And that shocked gold, silver, and Bitcoin.
#. Opportunity costs just got more expensive
The one thing that gold, silver, and Bitcoin all have in common is that when you own them, you don’t get paid any dividends. You don’t get paid any interest.
They just sit there. When you buy gold or silver, it just sits there in a vault looking back at you.
It doesn’t actually do anything. And this is where the opportunity cost of waiting for these assets, gold, silver, and Bitcoin, to shoot up just got a lot more expensive because now the Federal Reserve Bank is talking about raising interest rates.
That means holding cash can now pay you more money. What does that mean? If you put cash into a savings account, a high-yield savings account, or into a treasury, and as interest rates go up, the interest rate that you would get while holding on to the cash would now be going up as well.
Because now if you can put your money into a treasury that’s paying you 4% or 5% a year, that’s four to 5% now that the gold, silver, and Bitcoin have to outperform to make it worthwhile to buy those assets versus the cash.
As interest rates go up, the opportunity cost of not getting any returns on your money while waiting becomes more expensive.
#. Fear triggers are coming down.
Every time you see concerns about the economy, that’s what then triggers these assets, gold, silver, and Bitcoin, to generally rise.
When there were concerns about tariffs, we saw gold, silver, and Bitcoin benefit because people said, “This is going to hurt the United States economy. We need to get out of the United States dollar.”
When the United States attacked Iran, people said, “We need to get out of the United States dollar because this inflation is going to hurt the United States economy. It’s going to hurt the value of the United States dollar.”
Well, today, the concern about tariffs is not what it was before.
Today, the concern about the war in the Middle East, although there are always concerns about it restarting or ending or whatever, those concerns are not as scary as they were before.
Because there’s no fear trigger today, that fear trigger is not driving up the prices of gold, silver, and Bitcoin. Which means these three things, now at the same time, were able to come out and hammer gold, silver, and Bitcoin at the same time.
Now, I’m going to talk about whether this is a good buying opportunity or not in just a minute, but I want to talk about Bitcoin for a second because Bitcoin prices got absolutely demolished in 2026. And part of the reason for that, going beyond this, also has to do with something called liquidation.
The idea being a lot of people are buying Bitcoin as a speculative investment.
They know that Bitcoin is going to shoot up and go down. And because it’s very speculative, people have been trading it as a speculative investment with a lot of debt.
Some people are spending $1 and then getting $10 a Bitcoin or $20 a Bitcoin, which means there’s a lot of leverage, a lot of debt being used to buy and trade these investments like Bitcoin.
Well, what happens now when that investment goes up? Well, now you get richer because now your $1 investment might be able to make you $10 or 20x more money. But if that Bitcoin price falls now, not only do you lose more money, but what ends up happening now is the broker or the investment tool that you’re using to buy this Bitcoin with all this debt forces you to sell because there are stop-losses in place.
Oftentimes, these are called margin calls in the stock market.
But because there are a lot of people trading Bitcoin with derivatives, it has different terms.
Just understand that this is called liquidation. The idea being that Bitcoin sales are being forced because people are buying the Bitcoin not to own the asset.
They’re buying it because they want to get rich, and they’re buying it with 10x or 20x debt.
So now when Bitcoin prices fall, it triggers more liquidation, which then causes a bigger domino, more sell-off, which is why Bitcoin prices have been cut in half since the highs.
Silver has also been getting hit a lot harder than gold, partially because silver is just more volatile than gold. But also, people look at silver differently from gold.
Where gold is really just a hedge against inflation, silver is partially a hedge against inflation, but it’s also used in many different industries.
It’s used in the economy. And so now it can get hit if there are concerns about inflation and if there are concerns about silver’s usage in the economy.
We need more silver for many different parts of the economy. So there’s a silver shortage. And this is why many people believe that we need higher prices for silver.
But there’s a difference between what Wall Street believes silver should be trading at, meaning paper traders, and the actual users of the silver itself.
That can take some time to regulate because Wall Street can drive up the prices of silver or drive down the prices of silver to make it not really in line with reality.
But understand this is why silver prices are a lot more volatile than gold prices.
Now, this is where the question that everybody has is what’s going to come next, and should I buy gold, silver, or Bitcoin?. And this is where I do like to look at history, because while history doesn’t exactly repeat itself, it does rhyme.
The last time we heard the Federal Reserve Bank talking about raising interest rates was in 2022. And when 2022 hit, interest rates went up.
We saw gold prices get hit, silver prices get hit, and Bitcoin prices fell by around 60%.
Fast-forward from 2022 to today, and gold, silver, and Bitcoin have not fallen to zero. In fact, they’re significantly higher today than they were back in 2022. So, understand that there is a lot of panic and emotion out there.
But does this mean you should buy? It depends on what your goal is as an investor.
When I talk about investing in gold, I’ll talk about myself for a second. Uh, not because I recommend what I do to anybody else, but just so you understand where I’m coming from. I’ve been buying gold for a long time.
Just a small piece of my portfolio, about 2% of my portfolio.
I really don’t care what the price of gold is because for me, gold is a hedge against inflation. It is like doomsday insurance.
It is just a thing that I buy as a way to save hard money.
My theory is that if I save $10,000 worth of cash and $10,000 worth of gold in my backyard and I bury both of them, in 30 years, I believe the gold will have more buying power than the cash.
But I don’t like gold as an investment because it’s not actually producing any value.
So gold and silver kind of have that going for them, where people believe that it will continue to be a hedge against the dollar, and when there are concerns about inflation, they will go up. When those concerns go away, they will go down.
I mean, just take a look at historical gold prices. When the 2008 crash happened, quantitative easing was happening. Money was being printed. Concerns about inflation and hyperinflation were everywhere.
So, gold prices boomed between 2008 and 2012. But then in 2012, when people realized that the dollar was not going to collapse, gold prices fell. And then they stayed low all the way, not to 2013 or 14 or 15, 2016, 2017, 2018, 2019, but until 2020.
In 2020, when the pandemic hit, the money printer was turned back on. That was when gold prices started breaking new record highs again.
So gold benefits when there are concerns about inflation. Gold benefits when there are concerns about the economy. Gold benefits when there are concerns about the dollar. And so that’s where you want to understand how it plays in your portfolio.
Silver kind of follows a lot of what gold does, but it’s a lot more volatile because of the things that I’ve already discussed.
Bitcoin is a little bit difficult because it is a lot more speculative. Bitcoin hasn’t been around for centuries like gold has.
Bitcoin is a newer asset, and some people believe that it’s not going to be able to meet the technological side of the future.
Although people say that it is the tech of the future, and so this is where Bitcoin is a little bit different,t where you have to also bet now if the technology in Bitcoin is going to continue to thrive in the future.
For me, I believe it’s a speculative investment. If you believe that there’s going to be Bitcoin 10 years from now, well, then this could be a good buying point if it continues to go lower.
Generally, if you believe in the value of an asset, you want to buy it when it’s cheap, because now you can buy it when everybody else is selling.
But if you don’t believe that Bitcoin is a technology of the future, if you don’t understand it, then it’s probably not something you should be buying because now you’re buying something you don’t understand, and now you’re just gambling.
It can make you a lot of money, but it can also cost you all of your money. That’s the thing that you want to understand.
So if you believe in the Bitcoin technology, if you believe that technology is going to continue to evolve and be what we need it to be in the future, then you want to buy when it’s cheap.
If you don’t believe in Bitcoin, then you definitely should not be buying. That’s the thing that you want to understand.
So we are seeing a lot of changes coming in the economy. They’re probably going to continue to change.
Kevin Worsh is the new chairman at the Federal Reserve Bank, appointed by President Trump.
Everybody was hoping that Kevin Worsh was going to come in and hammer lower interest rates to significantly boost the economy and to boost markets. And investors were concerned that this was going to crash the dollar, which would be great for gold, silver, and Bitcoin.
Well, Kevin Worsh came into office, and he just gave his first speech. And in his first speech, he said, “I’m not going to do what Trump wanted. I’m not going to cut interest rates. We’re going to keep interest rates where they are right now. And as of today, I’m looking at potentially raising interest rates in 2026, not cutting interest rates.”
That came as a shock to Wall Street. The reason why it came as a shock is that everybody was expecting these lower interest rates. And that news then was a trigger for the gold, silver, and Bitcoin sell-off.
Why did it create a sell-off? Well, three reasons.
Reason number one was that gold, silver, and Bitcoin are all known as the debasement trade. They’re all investments against the United States dollar. And when Kevin Worsh says, llar,”“I’m going to do everything I can to protect the United States, you can start to see how they work against each other.
The second reason now has to do with the opportunity cost.
Because now, when Kevin Worsh is talking about potentially raising interest rates, that means the return that you get on your money goes up. Because if you have money sitting in a savings account, you have money sitting in a treasury.
If you have money in a high-yield savings account, well, now you can earn four to 5% interest on your money, which means you’re getting more interest while you wait, versus your gold, silver, and Bitcoin, which are not paying you.
So that means the cost of waiting just became more expensive, making the opportunity cost more expensive. And then there is no same fear trigger right now.
The tariff warnings and concerns are not there anymore.
The tariffs still exist, but the concerns about tariffs are not there. The conflict in the Middle East concerns are not there.
The conflict still exists, but that same fear that people had when it first started is not there.
So, there’s no fear trigger right now. Again, this could restart if something changes today or tomorrow. But that fear trigger, which also drove up gold, silver, and Bitcoin, is not there like it was before.
So these three things happened simultaneously, which then caused Bitcoin, silver, and gold to get hit hard.
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