Imagine a powerful authoritarian government (CCP, potentially, or maybe even the USA) felt threatened by Ethereum and wanted to attack the network in such a way that they were willing to pour billions or even trillions of dollars into the attack.
We know that buying a huge portion of ETH would drive the price up, but let's say cost is not something they care about. They then spin up a huge number of validators and nodes. They find a way to attack the network in such a way that many feel there is a real threat. Of course, the chain would fork and those validators would be slashed or black listed, perhaps 100% of their ETH is lost.
But at the same time this causes a crisis of faith (even if only short lived), causing the price to fall. Imagine they are (with some bank or something) also shorting ETH with significant leverage. They earn more ETH than they lose. Then they use this ETH to repeat the attack, ad infinitum.
How would the network handle this?
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