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Crypto market seems witnessing a new threat

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Crypto market has been facing major hits since the beginning of this year after witnessing a bullish 2021. In recent developments, the digital assets market has dropped sharply following the Russia-Ukraine conflicts. The conflict has escalated and it seems that the traders are about to witness a new threat. According to few reports it is unveiled that Chinese aircrafts had entered Taiwan airspace fueled speculation. And now many deem that the nation could be the next Ukraine. Tsai Ing-wen, the President of Taiwan has called for the island to enhance security following the Ukraine crisis.

How would the China-Taiwan conflict affect the crypto market?

According to experts in the cryptocurrency ecosystem, like most of the financial markets, the crypto market is vulnerable to geopolitical tensions. We have already evidenced the impact of the Russia-Ukraine conflict. It is worth noting that the war induced volatility had erased as much as $400 billion from the digital market this month.

On the other hand, Taiwan is one of the major nations that is playing a bigger role in the global semiconductor market. Hence, if the supply of these semiconductors are disrupted from the nation, the impact would have a far-reaching effect for the cryptocurrency mining industry.

The scenario can be explained as we saw when the world had a chip shortage that began in 2020 and dramatically pushed the prices of graphics cards towards the moon. Following such a scenario the cryptocurrency mining industry was impacted significantly ultimately affecting the prices in the market.

US could protect the prices

The rising China-Taiwan conflicts are posing a threat to global markets that are currently suffering from the Russia-Ukraine war. According to several reports, Joseph Wu, the Foreign Minister of Taiwan highlighted that their strategy is to make certain, and China will pay a very heavy price if it initiates conflict against the nation.

Moreover, while speaking to the United States Secretary of Defense, the Finance Minister of Taiwan argued for US continued support to Taiwan so that the public can defend themselves. 

Although many believe that the US has the potential to avoid the conflict, the nation in no way is committed to assist Taiwan in such a situation other than a pledge under the 1979 relations act to help defend itself. However, if the United States helps to avoid conflicts and halt wars the traditional and digital markets would recover.

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