Middle East conflict on the brink? Stock market massacre, Bitcoin drops to $52K

According to a report from Axios, U.S. Secretary of State Tony Blinken revealed that Iran and Hezbollah may launch attacks on Israel as early as Monday. With a series of bad news hitting the market, a stock market massacre unfolded, and gold once again became a safe haven. However, Bitcoin, which is touted as digital gold, plunged to $52,300 this morning.

Middle East Conflict on the Brink of Eruption?

According to reports, Iran and its Lebanese ally Hezbollah have vowed to respond to Israel for the assassination of Hamas political leader Ismail Haniyeh in Tehran and Hezbollah military commander Fuad Shukr in Beirut.

Secretary of State Blinken is coordinating with U.S. allies and attempting to exert last-minute diplomatic pressure on Iran and Hezbollah to limit their strikes and prevent the chance of an all-out war.

This retaliation may be different from the attack on Israel on 4/13 when Iran launched nearly 350 attack drones and missiles at Israel, with most being intercepted by Israel, the U.S., and their allies. Blinken stated that it is unclear what form the retaliation will take or the specific timing of the attack, but it may begin within the next 24 to 48 hours, as early as Monday.

Stock Market Massacre, Gold Once Again Becomes Safe Haven

Recent market news has been grim. Despite Federal Reserve Chairman Powell hinting at the possibility of starting an interest rate cut cycle in September after the 7/31 meeting, investors can't wait any longer! Data released on 8/1 suggests that the U.S. economic situation is deteriorating, with a sharp increase in initial jobless claims and the ISM Manufacturing Index far below expectations. The U.S. nonfarm payrolls released on 8/2 were below expectations, leading to a Black Friday as U.S. stocks plummeted, cryptocurrencies were also hit hard, and the sell-off continued into today's Asian markets.

The Nikkei Index fell by 7%, with continued selling in the Asia-Pacific markets. Japanese microstrategy Metaplanet dropped by over 50% in five days.

At the opening of the Taiwan Stock Exchange, it briefly fell below the 20,000-point mark, dropping nearly 7%, TSMC fell by over 7%, while Hon Hai, MediaTek, and Delta Electronics hit limit-down. The stock markets in Japan and South Korea also saw a massacre, with the Nikkei 225 Index opening on Monday with a drop of over 6%, the Tokyo Stock Price Index triggering a circuit breaker, and the Korean stock market falling by over 4%.

Gold prices once again hit a historical high as rate cut expectations and risk aversion boosted demand for gold.

BTC Plunges to $52,300 at One Point

Bitcoin, known as digital gold, did not follow the upward trend of gold but instead plunged to $52,300 this morning, down about 25% since failing to hold above the $70,000 mark on 7/29.