The global geopolitical tension escalated over the weekend after the USA and Israel carried out mutual attacks on Iran, creating a sudden surge of uncertainty that quickly spread across the region and beyond.
The military operation struck many targets and eventually led to the liquidation of Ali Khamenei (the supreme leader of the Asian country). Iran retaliated against several nations in the region, including the UAE, Bahrain, Qatar, and Saudi Arabia. The American president, Donald Trump, warned that the war may continue for up to four weeks, while leading European economies (some of which are nuclear powers), such as France, Germany, and the UK, have hinted that they may “defend their interest” and join the conflict soon.
Right now, the world is watching the Middle East with growing concern, as the risk of a wider conflict and even a potential World War III seems more real than it has in years. Beyond the countless human lives this devastating event would claim, it would also send shockwaves through global financial and crypto markets. To explore the potential impact, we asked four of the most popular AI-powered chatbots which digital assets would be hit the hardest if such a scenario unfolded.
Small Alts, Memes, and More
ChatGPT started with a disclaimer, stating that a world war will not be just “bad news” but cause a “systemic liquidity shock.” It predicted that such a conflict would lead to immediate market panic, with equities dumping and credit freezing. In that kind of environment, crypto would get hit just as hard as everything else.
The chatbot suggested that small-cap altcoins are at the highest risk because they have thin liquidity, few real buyers, and heavy retail exposure. It alerted that cryptocurrencies, whose market capitalization is under $100 million and whose use-cases are dubious, may collapse by up to 90% in a World War III scenario.
Another sector that may experience a real carnage is the meme coin niche. According to ChatGPT, tokens like PEPE, BONK, WIF, and FLOKI can plummet to zero since they are sentiment-driven and notorious for their enhanced volatility:
“In a true risk-off event like a global war, speculative appetite collapses first, and liquidity in meme tokens can disappear within hours.”
Google’s Gemini agreed with ChatGPT’s assumption. It forecasted that such a major conflict could have a devastating effect on small and mid-cap altcoins and meme coins due to mass panic selling and total lack of buyers.
Perplexity focused specifically on the biggest meme coins by market cap, Dogecoin (DOGE) and Shiba Inu (SHIB), estimating they would likely suffer the most due to their “extreme sensitivity to risk-off sentiment and lack of fundamental utility.”
Grok, the chatbot integrated within X, presented a rather different thesis. It claimed that stablecoins like Tether’s USDT and Circle’s USDC could be among the biggest victims due to their connection to the American dollar:
“Stablecoins are pegged 1:1 to fiat currencies like the USD, backed by reserves in banks, Treasuries, or other assets. In WW3, if major economies like the US face hyperinflation, debt defaults, or banking freezes (as seen in historical wars), these reserves could become worthless or inaccessible. In a global war, peg breaks could lead to total devaluation, turning them into “digital IOUs” for a collapsing dollar.”
How About BTC?
All four chatbots we consulted argued that Bitcoin would plunge substantially immediately after a potential announcement of a global war, but would remain the most resilient asset in the crypto sector. They also suggested that, despite the initial shock, BTC could recover its losses relatively quickly compared to the rest of the market.
“BTC would likely drop sharply alongside other risk assets as investors rush to liquidity. However, if the conflict leads to monetary instability or aggressive money printing, BTC could recover faster than most altcoins as its decentralziation and “digital gold” narrative regain strength,” ChatGPT stated.
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