Let's talk about what the Israel-Iran conflict really affects

First, on a macro level, the main impact is still the expectation of interest rate cuts.

First is inflation, which is primarily driven by oil prices due to Iran's actions. Wall Street estimates that if the Strait of Hormuz is blocked, oil prices could rise to $90-130 per barrel. It is known that for every $10 increase in oil prices, the CPI rises by 0.4-0.5 percentage points. This means that if oil prices break $100, the probability of a rate cut before September is low, and inflation risks continue.

Next is the risk aversion sentiment; stocks have plummeted, and spot gold has hit historical highs. The next step is to see whether Iran will escalate the conflict. If so, the consensus for two interest rate cuts by the Federal Reserve this year will be forced to delay, disrupting the pace of liquidity recovery, and the market will struggle to withstand pressure and remain depressed.

Of course, the impact on the cryptocurrency sector is quite evident, with a total market value evaporating by $420 billion in 24 hours. This does not account for dilution from unlocking. Under the sentiment of capital seeking safety, most investors prioritize cutting high-leverage altcoins; do not have any expectations for the short-term altcoin season.

Bitcoin's resilience remains superior to mainstream altcoins, with capital briefly flowing into derivative shorts and stablecoins.

However, the good news is that most investors are first converting their holdings back to dollar stablecoins rather than fiat currencies, which is a clear distinction from the MEME crash at the beginning of the year.

Still, the saying goes: until the uncertainty premium is completely hedged by central bank and fiscal policies, holding US dollars is the optimal guideline for survival during high volatility periods.