The villagers of Konoha would be terrified. Naruto has always been their hero, and an insane Naruto would be like a nightmare come true. Some might want to exile him, while others, like Shikamaru, would try to come up with a plan to either subdue or cure Naruto, knowing that his power could cause a great deal of destruction if left unchecked.
Sakura would be heartbroken. She's always had feelings for Naruto, and seeing him insane would be a huge shock. She'd likely try to use her medical skills to find a cure for whatever is ailing Naruto's mind. She might also try to get help from Tsunade, hoping that the former Hokage's knowledge could save Naruto.
Sasuke would be deeply affected. He would probably feel guilty for not being there to save Naruto. At the same time, he would vow to uphold Naruto's ideals and make the ninja world a better place, as a way to honor his friend's sacrifice.
His friends would be horrified. Sasuke, for instance, who has known Naruto for a long time, would be shocked at this transformation. He might initially try to reason with Naruto, thinking that there's still some good left in him. But as Naruto's psychopathic behavior continues, Sasuke would be forced to consider him an enemy and take action to stop him if necessary.
His other friends like Shikamaru would try to analyze the situation. Shikamaru, being the intelligent one, would look for patterns in Naruto's 'insane' behavior. He might suspect it's a ruse, but he would also consider the possibility that Naruto is actually in trouble. So he would try to approach Naruto carefully and talk to him to find out the truth.
Maybe in this fanfiction, Naruto is exposed to a powerful dark jutsu that slowly corrupts his mind. As he becomes insane, he begins to abandon the values he once held dear. He could start using his powers for self - gain rather than for the protection of the village, like taking over control of Konoha in a tyrannical way.
Sasuke would probably be both confused and a bit disgusted at first. He might see Naruto's new form as a sign of weakness. Sakura, on the other hand, would likely be more sympathetic and try to find a way to help Naruto. Kakashi would be calm as always and start to analyze the situation to figure out what caused the transformation.
She could also be amused in some cases. If the fanfiction has some really out - there but harmless ideas about Naruto, like him having a strange hobby that doesn't really change his fundamental good nature, Kushina might find it funny and just shake her head at the creativity of the fanfiction writer.
Obviously, Naruto and Hinata are the main characters. Naruto, the hero with a big heart but perhaps in this fanfiction, he has some insane tendencies. Hinata, on the other hand, is his love interest. She's the one who will likely be there to support him, understand him, and maybe even save him from his 'insane' self. There could also be other supporting characters from the Naruto universe like their friends or mentors who might play a role in how their relationship unfolds in this fan - created story.
Obviously, Naruto is one of the main characters. Since it's 'naruto insane genius fanfiction', he's likely to be the central focus with his extraordinary intelligence being highlighted. Sasuke is also often a main character as his relationship with Naruto is a crucial part of the Naruto universe. Sakura might also be there, and she could be shown in new ways, perhaps learning from Naruto's genius or being part of his grand plans. Kakashi could also play an important role, acting as a mentor or sometimes being amazed by Naruto's insane ideas.
Perhaps in the fanfiction, some sort of dark magic or curse has been placed on Naruto. This could be messing with his mind and causing him to act in an insane manner. It could be a way for the author to introduce a new and dark plot element to the story. Another cause might be that he has been betrayed by those he trusts the most, which shatters his mental state.
Madara Uchiha could also be a likely cause. If he somehow managed to return or had a long - planned scheme that involved breaking Naruto's sanity. He was a very powerful and devious foe who could use his knowledge of the ninja world and its powers to target Naruto's mental stability.