On March 4th, Goldman Sachs CEO David Solomon stated that financial markets have not yet fully absorbed the impact of the US-Iran conflict and that the cryptocurrency market may face further downward pressure in the coming weeks. According to Reuters, Solomon was surprised by the “moderate” market reaction to the Middle East conflict but emphasized that it will still take “a few weeks” for the markets to digest the short-term and medium-term effects of the event.
Solomon pointed out that crypto market volatility is largely influenced by oil prices, especially after Iran closed the Strait of Hormuz, making oil supply stability a key variable. He believes that unless geopolitical tensions directly impact economic growth, markets typically do not react violently immediately. However, due to war-induced risk aversion, the US dollar has strengthened, leading to significant sell-offs in cryptocurrencies and overall market pressure.
The US-Iran conflict has now entered its fourth day. President Donald Trump confirmed the killing of Iran’s Supreme Leader, which caused a sharp decline in the crypto market. Israel also launched airstrikes against organizations involved in Iran’s next Supreme Leader election, further escalating regional tensions.
Solomon emphasized that since the outbreak of war, the US economy has remained fundamentally stable, with strong monetary policies helping to maintain economic resilience. However, the impact of the war still needs to be monitored. He warned investors that short-term market volatility may continue, especially given the high risk of fluctuations in crypto assets.
Overall, the US-Iran war and the flow of global risk-averse funds are exerting dual pressure on cryptocurrency prices. Investors should closely monitor geopolitical developments and the US dollar trend to assess potential market rebounds or declines.
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