Bloomberg: Global Collapse Imminent If Taiwan Strait Conflict Erupts! “10 Times Bitcoin Market Cap” to Vanish

Bloomberg issues a lengthy warning this morning that if China were to militarily invade Taiwan, the global economy would lose approximately $10 trillion, which is equivalent to about ten times the current market value of Bitcoin. The article highlights the growing economic and military influence of China, the increasing national identity of Taiwan, and the tense relationship between Beijing and Washington as factors that contribute to the potential crisis. Bloomberg’s economic research estimates that a conflict between China and Taiwan would result in a significant global economic loss, surpassing the impacts of the Ukraine war, the COVID-19 pandemic, and the global financial crisis. The simulation conducted by Bloomberg considers two scenarios: China’s invasion dragging the United States into geopolitical conflict and China blocking Taiwan’s trade with the rest of the world. The article emphasizes Taiwan’s influential role in the global semiconductor supply chain and the potential disruptions that would occur in the production of notebooks, tablets, and smartphones if war were to break out. Other industries that heavily rely on low-end chips, such as the automotive industry, would also be significantly affected. The article further discusses the impact on Taiwan’s GDP, estimating a 40% decline, and the increased costs in terms of manpower and economy for the concentrated population and industrial base along the coast. China’s GDP would suffer a 16.7% blow due to disruptions in trade relations with major partners and the inability to access advanced chips. The United States would also face risks, with a 6.7% decline in GDP due to its reliance on the Asian electronics supply chain, particularly for Apple products. The global GDP would decrease by 10.2%, with countries like South Korea, Japan, and other East Asian economies experiencing the greatest impact. The article concludes by drawing attention to the lessons learned from the conflicts in Ukraine and the Middle East, emphasizing the importance of not underestimating the potential of small sparks to ignite significant conflicts. It notes that various actors, including Wall Street investors, military planners, and businesses relying on Taiwanese semiconductors, have already started taking action to hedge against risks. Experts from the Strategic and International Studies Center on China issues have reported a significant increase in interest and discussions about the Taiwan crisis among multinational corporations since Russia’s invasion of Ukraine in 2022.