JAKARTA - The escalation of the conflict in the Middle East since the US-Israeli tension to Iran on Saturday, February 28, has spread with the closure of the Strait of Hormuz, a strategic route through which about 20 percent of the world's oil trade passes, as well as Iran's retaliatory attacks on US facilities in a number of Gulf countries such as Bahrain, Qatar, Kuwait, Iraq and the United Arab Emirates.
This development triggered a surge in energy prices, with oil reportedly rising to US$80 per barrel, triggering risk-off sentiment in various asset classes while raising concerns about inflation and global supply stability.
Amid the pressure, global gold prices strengthened in the range of 5,100 US dollars per troy ounce, as safe haven demand increased, while US technology stocks rebounded slightly. The 24/7 crypto market is one of the most responsive indicators in reflecting changes in investor sentiment.
Based on data from CoinMarketCap, Bitcoin corrected to US$63,100 at the weekend, then jumped to US$70,000 at the beginning of the week, and is now moving in the range of US$68,000, with a global crypto market capitalization of around US$2.33 trillion.
Vice President of INDODAX, Antony Kusuma, assessed that this high volatility reflects the high sensitivity of the market to geopolitical developments and macro risks.
"The surge and correction in a matter of days show that the market is very headline-driven. In this situation, global sentiment and policy dynamics are the main factors affecting the movement of risky assets, including stocks and crypto," he said, Wednesday, March 4.
In the initial phase of turmoil, investors generally take a risk-off stance to maintain liquidity. If uncertainty continues, some investors consider more defensive assets. Antony said that avoiding FOMO-based decisions and implementing disciplined portfolio diversification and risk management are the most rational steps.
"In uncertain market conditions, portfolio diversification is one of the approaches that many people take, including shifting some exposure to more stable crypto assets such as Tether (USDT) or USD Coin (USDC), or gold-based crypto assets such as Tether Gold (XAUT) which is strengthening, while maintaining a measured allocation to the main assets," explained Antony.
In line with this, INDODAX emphasizes its commitment to maintaining liquidity, system security, and transparency, as well as strengthening risk education.
"In the midst of geopolitical dynamics, risk management discipline and having a long-term investment perspective remain the key to being rational and adaptive in the face of global uncertainty," he said.
As the largest crypto exchange platform in Indonesia, INDODAX continues to educate members to remain rational amid market volatility. He urged investors to always do their own research (Do Your Own Research) and maintain strict risk management.
"At a time when the market is full of macro pressures like now, a gradual investment strategy or Dollar Cost Averaging (DCA) remains the wisest option to mitigate volatility," said Antony.
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