While everyone's eyes are on current conflicts, there is a much greater risk in China that could be catastrophic for the markets.

To quickly get you up to speed, tensions between China and Taiwan are increasing.
China continues to reinforce its "reunification" stance, even by force if necessary, while continuing its military exercises around the island.
But why is this so important for the markets?
Taiwan is not just any island.
Its major company TSMC produces 71-72% of the world's contract semiconductors and over 90% of the most advanced chips used in AI, smartphones, data centers, and electric vehicles.
In fact, in the most modern technology (such as 3nm chips), TSMC produces almost all of them worldwide, with around 95% of the market.
It is the single point of dependence for global AI: it manufactures virtually all of NVIDIA, AMD, and other tech giants' chips like Apple, Amazon, Google...
In case of invasion or conflict, the global tech industry is most likely to suffer an unprecedented supply "shock."
According to a Bloomberg study, a war between these two countries would cost the global economy $10.6 trillion (British pounds) just in the first year, which is 9.6% of the global GDP.
A much higher impact than COVID-19 or the 2008 financial crisis.
Taiwan is also a strategic node for trade and maritime transportation in Asia-Pacific.
Approximately 13% of global maritime trade by value passes through the Taiwan Strait, serving key ports like Shanghai, Ningbo, and Kaohsiung, with routes to Japan and South Korea.
If the conflict escalates, routes become more expensive, trade slows down, and supply chain pressures spike.
In the worst-case scenario, if the conflict simultaneously blocks routes between Asia and Australia, ships would have to detour around the Southern Hemisphere, increasing navigation distances by an average of 58%.
If China enters a larger conflict, sanctions and trade restrictions would follow.
The impact would be global: China's GDP would fall by 11%, the United States by 6.6%, the European Union by 10.9%, and Asian economies like South Korea and Japan would suffer declines of 23% and 14.7%, respectively. Taiwan's GDP would shrink by 40%.
These are estimates I pulled from Bloomberg. Behind this article, there are many hours of research, even in Chinese. Follow us if you're interested in this type of content @Cryptoprofe_.
How would this affect the markets and Bitcoin?
In such extreme situations, investors would seek to sell to protect themselves from declines.
In the short term, an invasion scenario without warning would be catastrophic.
We would see a domino effect across different markets, from the most traditional to the most technological. Affecting almost everyone.
Regarding Bitcoin, I would like to say it would act as a safe haven, as it has characteristics that could favor it in such scenarios.
But the reality is that until today $BTC it has behaved more like a risk asset, following macro trends and markets.
Of course, hearing this, like other global contexts, it's easy to be afraid, but that's where the worst investing mistakes are made.
I explained the worst-case scenario.
For now, there's no need to panic; there are many events that could also be catastrophic, but I wanted to explain the most probable in the medium to long term.
However, to give you an idea, the most recent intelligence reports indicate that China currently has no plans to invade Taiwan, and prefers to achieve reunification through peaceful means.
They estimate a 7% chance of invasion this year, 17% before 2027.
China is very aware that an invasion would be extremely difficult and carry a high risk of failure, especially with U.S. intervention.
Most likely, nothing will happen or an agreement will be reached, but it is a situation we will need to monitor over the coming years.
What are we doing to protect ourselves?
Simply continuing with our investment strategy, staying alert to all news, and considering any scenario.
We believe it is a mistake to base all analysis on a possible conflict that we don't know will happen; markets always have uncertainty that disappears over the long term.
And remember. You must be prepared for any scenario.
- Crypto Profe.