What if China severs Taiwan's undersea internet cables?
Cutting Taiwan's submarine cables is grey-zone isolation: TSMC and semis dip ~2% and VIX bids modestly, but it degrades comms, not fabs, so the equity hit is contained. Directly rhymes with the 2023 Matsu cable cuts and 2024-25 Baltic cable severings, which spooked headlines but barely moved indices. Transmission is mostly sentiment via the semi complex. Forward angle: repeated, deniable cable attacks are a coercion ratchet markets learn to shrug off, so each successive event has less beta.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. China cuts Taiwan's submarine internet cables, isolating the island in a grey-zone coercion campaign. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Semiconductor supply risk ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +8.8% hist +0.55–+10.64% · other way -2.31% (n=12) |
| 2 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -3.2% hist -1.84–-0.72% · other way -0.05% (n=12) |
| 3 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -2.1% hist -2.85–-0.02% · other way +1.64% (n=12) |
| 4 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -2.1% hist -1.29–-0.55% · other way +1.4% (n=12) |
| 5 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -2.0% hist -1.95–-0.27% · other way +4.13% (n=12) |
| 6 | Tech sector XLK 📈 chart | Equity | ▼ -2.2% hist -1.37–-0.62% · other way +0.37% (n=12) |
| 7 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -1.8% hist -2.23–-0.1% · other way +1.35% (n=12) |
| 8 | ASML ASMLon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -3.72–+0.86% · other way -0.91% (n=12) |
| 9 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -0.91–-0.34% · other way -2.72% (n=12) |
| 10 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.4–+1.71% · other way +5.76% (n=12) |
| 11 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -3.81–+0.64% · other way -1.7% (n=12) |
| 12 | Marvell MRVLon Hyperliquid 📈 chart | Equity | ▼ -1.4% hist -1.03–-0.15% · other way -0.28% (n=12) |
| 13 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.3% hist -2.41–+3.14% · other way +8.12% (n=12) |
| 14 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.0% hist -0.11–+1.68% · other way +0.84% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on MSTR/JPM/XLF: the +11%/+3.8% history is ASML-crash and tariff-relief beta during a BTC bull, not cable-sabotage grey-zone coercion — regime-contaminated, off-shock analogues.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| ETH ETH | SHORT | -7.7% · 5d -4.8% | 76% | 24 | 0.37 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -5.2% · 5d -3.1% | 68% | 27 | 0.28 | ✓ matches cascade |
| Volatility VIX | LONG | +6.0% · 5d +4.0% | 65% | 31 | 0.27 | ✓ matches cascade |
| NDX NDX | SHORT | -0.4% · 5d -1.2% | 68% | 33 | 0.26 | ✓ matches cascade |
| SOL SOL | SHORT | -6.7% · 5d -6.8% | 70% | 20 | 0.26 | ✓ matches cascade |
| AUD AUD | SHORT | -0.6% · 5d -0.4% | 63% | 28 | 0.22 | ✓ matches cascade |
| KRW KRW | LONG | +0.1% · 5d -0.3% ↺ fades | 61% | 28 | 0.20 | ⚠ differs |
| MU MU | SHORT | -2.9% · 5d -3.4% | 61% | 33 | 0.18 | ✓ matches cascade |
| AMD AMD | SHORT | -0.2% · 5d -1.7% | 61% | 34 | 0.17 | ✓ matches cascade |
| Gold XAU | LONG | +1.1% · 5d -0.6% ↺ fades | 61% | 29 | 0.17 | ✓ matches cascade |
| INTC INTC | SHORT | -2.8% · 5d -1.7% | 59% | 34 | 0.17 | ✓ matches cascade |
| NVDA NVDA | SHORT | -0.9% · 5d -3.7% | 61% | 29 | 0.15 | ✓ matches cascade |
| AVGO AVGO | LONG | +2.3% · 5d -2.0% ↺ fades | 57% | 28 | 0.14 | ⚠ differs |
| TSM TSM | SHORT | -1.6% · 5d -2.3% | 58% | 30 | 0.13 | ✓ matches cascade |
Why this probability
Cable cuts already recurrent grey-zone tactic near Taiwan; full isolation harder but partial likely. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.