What if a bridge exploit forces a crypto exchange to socialize losses?
A drained CeFi bridge forcing the exchange to halt deposits and socialize losses is a counterparty-trust shock: ETH leads (-5.7%) given DeFi/bridge exposure, BTC follows on exchange-solvency fear. This is the Bybit-Feb-2025 / cross-chain-hack template, where a venue-specific breach spread via withdrawal-run psychology. The transmission is which venue and how big the socialized haircut — contagion stays contained if the exchange ring-fences and backstops, but a withdrawal freeze turns it systemic.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 (electric blue) over time vs the market's (Polymarket, amber), 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. An exploit draining a CeFi-operated cross-chain bridge forces the exchange to halt deposits and socialize user losses. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ — which propagate through our causal graph to the markets below.