What if offshore regulators force crypto funds to unwind and repatriate?
Offshore regulators forcing crypto funds to deregister and repatriate triggers forced unwinds of leveraged on-chain positions, so the deleveraging — not the legal headline — drives the move as funds dump ETH/alts to meet the mandate. Rhymes with the post-FTX 2022 deleveraging and the broad 2025-10 liquidation cascade, where forced selling overwhelmed order books. The trade_tension/tariff/Alibaba mapping is wrong; this is a leverage-unwind shock, so the right read is a risk-appetite/delever channel, not US-China trade.
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 1–3 years 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 risk-off shock. Offshore regulators force crypto funds to deregister and repatriate, triggering forced unwinds of leveraged on-chain positions. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Risk-parity deleveraging ▲ — which propagate through our causal graph to the markets below.