Taiwan invasion - how would it affect bitcoin

[paxmao]

More than a rumour, this is becoming a Heavy Metal live streaming at 4 a.m. China is building up their military to the point in which they could actually enact their desire of taking effectively over the government of Taiwan. As most of you know, as of now, Taiwan is considered a "rebel territory" by China, "that is part of China". Taiwan is also part of the strategy of the US and its allies in the Northern Pacific (Japan, South Korea). Taiwan is nothing less than a territory in dispute between China and US (not exactly, as the US does not argue that is US territory).

So, nothing to worry about, just another quarrel between the superpower and the possibly next superpower. But there is a little factor that makes Taiwan a very interesting place, and that is called TSMC  AKA Taiwan Semiconductors. This company (along with Samsung) manufacture most of the semiconductors worldwide and they have technologies that are even a decade ahead of competitors.

What do you think could happen if a proxy war for Taiwan takes place in the next years? As a hint, today a few car manufacturing plants have reduced production due to lack of semiconductors. Many other industries are also affected. Imagine that TSMC is unable to continue production or that factories are destroyed in the process. This would mean a global slowdown and a crisis that may dwarf COVID.

BTW, a semiconductor plant is nothing you can improvise. The investment is huge, the technical difficulties extreme and building times quite long.

My advice, if you hear winds of war, buy. You know what.

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[Darker45]

I don't think there will be an invasion anytime soon. Although it is true that China could easily take Taiwan by force if they intend to do it, China is also very much aware how it won't happen without fighting against allied forces as well. And that wouldn't be easy for them. That is a war that wouldn't be worth it. Not only would China fail, they will be humiliated.

As to its potential effect to Bitcoin, I guess there won't be much unless it will become a full-blown war, which I don't think will happen. The China-Taiwan tension has been around for some time. The tension rises and falls but it never escalated into a war.

[enhu]

I don't think there will be an invasion anytime soon. Although it is true that China could easily take Taiwan by force if they intend to do it, China is also very much aware how it won't happen without fighting against allied forces as well. And that wouldn't be easy for them. That is a war that wouldn't be worth it. Not only would China fail, they will be humiliated.

As to its potential effect to Bitcoin, I guess there won't be much unless it will become a full-blown war, which I don't think will happen. The China-Taiwan tension has been around for some time. The tension rises and falls but it never escalated into a war.

It may not go into war since the US told the news that they are not looking to make war but only to assist Taiwan not to be invaded.

But China has become aggressive in response to the fleet surrounding Taiwan which includes US and EU ships. They flew over Taiwan's airspace with more than 50 fighter jets recently, they reasoned it's an exercise for their independence which dates back to 1 October.

These countries are just finding ways to see how each would react and who will first shoot. American submarine also bumped into something under South China Sea, the report is just not very clear but they were talking about drones underwater or something.

[crwth]

I think this will affect Bitcoin negatively (in the short term), and the reasons that I thought of are

1. The need for semiconductors is never-ending, thus affecting the market if they were to halt operations
This tendency is that many people would have to liquidate their assets to purchase the stuff they want or need that involves possibly semiconductor devices. Probably in Taiwan market would be most affected.

2. People affected will find other ways to earn, and it can be with cryptocurrencies or Bitcoin in general.
- This could affect the price negatively if they need to liquidate money fast.

It's important to note that the world will be okay since they are not one of the top exporters in the world, but it can still affect the lives there. I'm looking forward to what cryptocurrency can do more for us in the distant future, as it is essential and valuable to everyone. I do hope that a lot of people would even use it and share it with their peers.

[avikz]

I think in case of a war, the price of bitcoin will be positively impacted. We have seen similar things happening during the Hong Kong protest where people had purchased bitcoin in bulk when Chinese government imposed a banking ban on the protesters. I think, we will see a reparation of this trend in case China enters into a war with Taiwan.

Make no mistake, this could very well become a world war because US is looking for opportunities to challenge China since a long time. Japan and Australia are their allies in the war against China and India could also join hands there. If this happens, it could increase the demand of bitcoin temporary thus pushing its price up.

[Charles-Tim]

I think in case of a war, the price of bitcoin will be positively impacted.

I think so too, citizens of a country where there is war are always afraid of banks and buy bitcoin, maybe because they think the war can result to banks shot down or because they think they will not be able to access their fiat for long time because of bank shot down during the period. I have seen war cases that bitcoin price went premium in such country, so the price of bitcoin will increase in my opinion.

Make no mistake, this could very well become a world war because US is looking for opportunities to challenge China since a long time.

I doubt this will happen, this kind of situation that has been existing for long that has never resulted to war is not worth it to result to war. Countries are even afraid of third world war because the second world war is not a easy one at all while many people lost their lives, how will the third one be with more advanced sophisticated weapons that can destroy millions of lives in a single moment.

[davis196]

China is calling for a peaceful unification with Taiwan,but Taiwan would never unite with China.
I also don't think that China is ever going to start a war with the USA just for the sake of conquering Taiwan.
There's too much risk and too little benefit of starting such war.
Of course the Chinese will keep "waving the big stick" at Taiwan,while trying to achieve other goals in their diplomacy.We don't know how the USA will react to a Chinese invasion in Taiwan.
I think that any insecurity and concerns anywhere around the world are positive for the Bitcoin price.
Financial assets like Bitcoin usually increase their value a lot in times of uncertainty.
2020 and 2021 are the years of the pandemic and the lockdowns,and the Bitcoin price increased from 10K to almost 60K USD in that time frame.

[pickforbies]

I think this will affect Bitcoin negatively (in the short term), and the reasons that I thought of are

1. The need for semiconductors is never-ending, thus affecting the market if they were to halt operations
This tendency is that many people would have to liquidate their assets to purchase the stuff they want or need that involves possibly semiconductor devices. Probably in Taiwan market would be most affected.

2. People affected will find other ways to earn, and it can be with cryptocurrencies or Bitcoin in general.
- This could affect the price negatively if they need to liquidate money fast.

It's important to note that the world will be okay since they are not one of the top exporters in the world, but it can still affect the lives there. I'm looking forward to what cryptocurrency can do more for us in the distant future, as it is essential and valuable to everyone. I do hope that a lot of people would even use it and share it with their peers.

Agree, I'm on side of people who think more affected tragically for Bitcoin. As a biggest semiconductor production, Taiwan has a gain power and be brave to challenge china. They hold a trigger point there.
UPDATE: https://www.reuters.com/world/china/chinas-xi-says-reunification-with-taiwan-must-will-be-realised-2021-10-09/

[Lucius]

China is building up their military to the point in which they could actually enact their desire of taking effectively over the government of Taiwan.

Do you think China couldn’t have conquered Taiwan 5, 10, or 20 years ago if they really wanted to? Of course, technology is advancing (in this case, the military), but I don't see what China needs to achieve in military terms to occupy a relatively small island that is only 130 km off the west coast of China. I would love to see the US and their allies in case that happens, because I don’t think they would dare attack one such military force that possesses atomic weapons, and has a numerical strength of over 4 million troops (total with reserve and paramilitary).

What do you think could happen if a proxy war for Taiwan takes place in the next years? As a hint, today a few car manufacturing plants have reduced production due to lack of semiconductors. Many other industries are also affected. Imagine that TSMC is unable to continue production or that factories are destroyed in the process. This would mean a global slowdown and a crisis that may dwarf COVID.

Maybe we will walk more or ride bicycles, which would not be so bad for our health and the health of the planet. And maybe the US and allies are building some secret plant to produce semiconductors, because I don’t believe they would throw all the cards at Taiwan in case China wanted to conquer it one day.

My advice, if you hear winds of war, buy. You know what.

The winds of war are always in the air, just not the kind that people often talk about. In the event of a war of global powers, I do not believe that Bitcoin can remain intact and stable, because war raises the value of some other things.

[Vaskiy]

China is calling for a peaceful unification with Taiwan,but Taiwan would never unite with China.
I also don't think that China is ever going to start a war with the USA just for the sake of conquering Taiwan.
There's too much risk and too little benefit of starting such war.
Of course the Chinese will keep "waving the big stick" at Taiwan,while trying to achieve other goals in their diplomacy.We don't know how the USA will react to a Chinese invasion in Taiwan.
I think that any insecurity and concerns anywhere around the world are positive for the Bitcoin price.
Financial assets like Bitcoin usually increase their value a lot in times of uncertainty.
2020 and 2021 are the years of the pandemic and the lockdowns,and the Bitcoin price increased from 10K to almost 60K USD in that time frame.

It doesn't look like peaceful unification call. Xi Jinping had said "The historical task of the complete reunification of the motherland must be fulfilled, and will definitely be fulfilled" and this statement doesn't look like a peaceful approach. China somehow want Taiwan get unified with them. There is very low chance of war, but countries that are standing against china will keep on saying USA will support Taiwan save its sovereignty.

This issues weren't gonna make any big impact over the bitcoin market for many reasons. Everyone predicting the market connecting it to the war

[beerlover]

There are two different parts of this discussion. First of all, is this company doing something that is impossible to do? I mean if the whole worry was over some factory, that is because others do not find it either profitable or just care about it, believe me if there was enough money to be made from this then I can see super rich people investing into a factory, in fact series of factories all over the world and get those chips made instantly, 100x the amount produced yearly.

Some people may say it is because that Taiwanese company is good and that is why there isn't that many, but rich people are rich for a reason and they can pay 1000x more than what those people are getting and hire their engineers and built bunch of factories and raise their own good engineers there. However the annexation part? That is just China becoming more of a danger to the world, I do not like to talk about that part because people assume bad things when I raise concern about it.

[Hydrogen]

Taiwan carries considerable strategic and economic value being the world's largest manufacturer and supplier of semiconductors.

If I'm remembering right, the cost to construct a semiconductor foundry ranges around $20 billion. Which could put it outside the budget of even billionaires like Elon Musk who looked into acquiring their own semiconductor foundry ever since supply chain issues manifested in 2020.

If china invades taiwan using military force, taiwan's semiconductor foundries could be damaged or destroyed. There is a chance taiwan could choose to destroy their semiconductor plants, rather than have china capture them intact. That could be one reason behind china's hesitation. There is also a domino effect. If neighboring nations see china invading taiwan, they could take steps to harden their defenses against being treated in a similar manner. And so its normal to take time to weigh the pros versus cons and try to come up with a way to invade taiwan that guarantees their semiconductor industry can be captured completely intact.

If taiwans semiconductor industry is damaged. There is a chance that remaining semiconductor producers could be repurposed to producing higher priority chips. Worst case scenario: ASICs and GPUs are deemed "low priority" or "non essential" while chips for other industries are deemed the opposite. ASIC and GPU production could take a hit. Even if those industries are not directly being targeted.

[btc_angela]

I think in case of a war, the price of bitcoin will be positively impacted. We have seen similar things happening during the Hong Kong protest where people had purchased bitcoin in bulk when Chinese government imposed a banking ban on the protesters. I think, we will see a reparation of this trend in case China enters into a war with Taiwan.

I think it's different scenario though, as stated by OP, if a war broke out, then not only bitcoin but the whole financial market will be affected negatively.

Make no mistake, this could very well become a world war because US is looking for opportunities to challenge China since a long time. Japan and Australia are their allies in the war against China and India could also join hands there. If this happens, it could increase the demand of bitcoin temporary thus pushing its price up.

So make no mistake as well, China is not that dumb to go full war on it's province of Taiwan, they would sit down and talk about it with their counterparts. This are all Chinese, it's not that they are going to invade a new territory. Maybe in that case it will really case a world war, you can consider this as a internal conflict.

[enhu]

I think in case of a war, the price of bitcoin will be positively impacted. We have seen similar things happening during the Hong Kong protest where people had purchased bitcoin in bulk when Chinese government imposed a banking ban on the protesters. I think, we will see a reparation of this trend in case China enters into a war with Taiwan.

I think it's different scenario though, as stated by OP, if a war broke out, then not only bitcoin but the whole financial market will be affected negatively.

Make no mistake, this could very well become a world war because US is looking for opportunities to challenge China since a long time. Japan and Australia are their allies in the war against China and India could also join hands there. If this happens, it could increase the demand of bitcoin temporary thus pushing its price up.

So make no mistake as well, China is not that dumb to go full war on it's province of Taiwan, they would sit down and talk about it with their counterparts. This are all Chinese, it's not that they are going to invade a new territory. Maybe in that case it will really case a world war, you can consider this as a internal conflict.

There was an article mocking Taiwan might suffer the same fate as Afghanistan if they engage in war. War is possible because Taiwan couldn't stay neutral since China is up to reunite just as how they did with Hongkong.

China might not go to war literally but will only take it to economic war just as Trump started. It's a slow war which affected almost all countries since we see China as a source of the products we have in our stores. It's happening we will not see electronic devices but also agricultural products are not delivered from China which containervans are piling up the ports. None of these countries wants business to stop. China's option is just to negotiate with Taiwan, the province is just a stone throw away. These two are very secretive however so everyone around may not be involved.

[Sithara007]

Do you guys really think that China would actually invade Taiwan? Despite it's huge population and monetary surplus, in terms of military strength China is far behind other countries like US and Russia. In fact they are even behind their own neighbors like Japan. Taiwan invasion will be like Waterloo for the PLA, as the Taiwanese armed forces will be fighting for their very survival. Even if the Americans don't directly support the Taiwanese, PLA is likely to suffer huge losses (in terms of manpower, equipment and funds).

[so98nn]

This is well structured study considering the Taiwan and its famous company TSMC. It was amazing to see how they have overcome the difficulties being inside Taiwan, territory under dispute and stressful political pressures all the time. I think the best case scenario is way simple here. If any of the country tries to invade into Taiwan then they will simply have to give proper direction to the TSMC by means of new taxation system, regulatory views and possibly the “price control” acts will be prime importance.

So the effect on bitcoin would entirely depend on one thing: Who rules Taiwan, whether they will bring down the existing companies and reform them and whether they will come under entire new law.

[Kakmakr]

In a time of war, things change very quickly. In WWI / WWII most ordinary factories changed their manufacturing to supply goods and equipment that were needed for the war efforts.

We know Silicon Valley in the US has the capability to manufacture and develop semiconductors and electronic chips... so they will just have to step up their operations and expand their capacity to replace the loss of the manufacturing abilities in Taiwan, if that happens.

[btc78]

It has been a long issue that Taiwan is owned by China's territory and i believe even History can tell that it is indeed reality .
so basically this isn't really a worldwide problem though there are big country that using this advantage in their favor.

My advice, if you hear winds of war, buy. You know what.

I know what your saying here and Yes , I am ready if something like this happen lol .

[Lucius]

Do you guys really think that China would actually invade Taiwan? Despite it's huge population and monetary surplus, in terms of military strength China is far behind other countries like US and Russia. In fact they are even behind their own neighbors like Japan. Taiwan invasion will be like Waterloo for the PLA, as the Taiwanese armed forces will be fighting for their very survival. Even if the Americans don't directly support the Taiwanese, PLA is likely to suffer huge losses (in terms of manpower, equipment and funds).

Maybe some serious military analysts can answer your question about whether China will ever decide to act militarily towards Taiwan, and I think China will be very careful in that regard - before that, they will ask for Russia's support, and we all know that in this package of support, they automatically receive the support of Iran and some other countries close to China.

As for military strength, look at the comparison and draw your own conclusions, but I think everything is quite clear -> Comparison of China and Taiwan Military Strengths (2021)

According to the PowerIndex rankings, China is the 3rd country in terms of military strength, and Taiwan is on the 22nd place in that ranking.

[Coin_trader]

I don't think there will be an invasion anytime soon. Although it is true that China could easily take Taiwan by force if they intend to do it, China is also very much aware how it won't happen without fighting against allied forces as well. And that wouldn't be easy for them. That is a war that wouldn't be worth it. Not only would China fail, they will be humiliated.

As to its potential effect to Bitcoin, I guess there won't be much unless it will become a full-blown war, which I don't think will happen. The China-Taiwan tension has been around for some time. The tension rises and falls but it never escalated into a war.

It may not go into war since the US told the news that they are not looking to make war but only to assist Taiwan not to be invaded.

But China has become aggressive in response to the fleet surrounding Taiwan which includes US and EU ships. They flew over Taiwan's airspace with more than 50 fighter jets recently, they reasoned it's an exercise for their independence which dates back to 1 October.

These countries are just finding ways to see how each would react and who will first shoot. American submarine also bumped into something under South China Sea, the report is just not very clear but they were talking about drones underwater or something.

US assisting Taiwan can still ignite a war since they are helping China's enemy. Many country might interfere on this conflict just like Afghanistan since 2 leading country are involved. If this invasion will continue with a violent attack, I think this will give a total chaos.

But this will not Bitcoin directly since Taiwan ain't a major holder nor play a major role on Bitcoin. Maybe if a world war ignite then world economy will gonna be heavily affected same with crypto.