What if the cross-currency basis blows out and swap lines reopen?
A dollar-funding scramble blows the cross-currency basis negative; non-US banks bid dollars at any price, HY credit and EUR/USD sell, VIX bids until Fed swap lines reopen. This rhymes with Sep-2008 post-Lehman and March-2020, when the basis gapped to multi-hundred-bp and the Fed's FX swap lines were the circuit-breaker. The tell to trade is the basis itself and FRA-OIS, not equities, which lag the funding signal.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A scramble for dollar funding sends the cross-currency basis sharply negative, forcing central-bank swap lines to reopen globally. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · Credit spreads ▲ · Financial conditions ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -4.29–+0.65% · other way +27.47% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.1% hist -11.39–+1.49% · other way -1.04% (n=11) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -3.28–+0.97% · other way +6.05% (n=11) |
| 4 | High-yield credit HYG 📈 chart | Rate | ▼ -0.8% hist -0.81–-0.09% · other way -0.28% (n=12) |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -7.15–+2.13% · other way +4.87% (n=11) |
| 6 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.7% hist +0.13–+0.69% · other way +0.89% (n=12) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.6% hist -1.62–+4.01% · other way -0.58% (n=12) |
| 8 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -1.19–+0.17% · other way -0.88% (n=12) |
| 9 | Financials XLF 📈 chart | Equity | ▼ -0.6% hist -0.32–-0.18% · other way +0.01% (n=12) |
| 10 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -2.94–+1.19% · other way +21.75% (n=11) |
| 11 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 12 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.81–+0.06% · other way +0.06% (n=12) |
| 13 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.36–-0.16% · other way -0.73% (n=12) |
| 14 | JPMorgan JPM 📈 chart | Equity | ▼ -0.5% hist -0.34–-0.02% · other way +2.16% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade's SHORT on GBPUSD: the +6/+5% prints are the March-2023 SVB cluster where the dollar sold off — a cross-currency-basis blowout is a dollar-funding squeeze, the opposite shock; history is regime-contaminated.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -9.1% · 5d -9.4% | 81% | 18 | 0.39 | ✓ matches cascade |
| KRW KRW | SHORT | -1.6% · 5d -0.1% | 66% | 34 | 0.31 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d -0.0% | 69% | 33 | 0.30 | ✓ matches cascade |
| SPX SPX | LONG | +0.1% · 5d -0.1% ↺ fades | 66% | 40 | 0.30 | ⚠ differs |
| MSTR MSTR | SHORT | -3.2% · 5d -3.4% | 64% | 35 | 0.23 | ✓ matches cascade |
| ETH ETH | SHORT | -6.2% · 5d -6.1% | 67% | 18 | 0.22 | ✓ matches cascade |
| Gold XAU | LONG | +0.7% · 5d +0.3% | 62% | 35 | 0.21 | ⚠ differs |
| SMH SMH | LONG | +1.4% · 5d -0.7% ↺ fades | 62% | 35 | 0.20 | ⚠ differs |
| USDJPY USDJPY | LONG | +0.3% · 5d -0.1% ↺ fades | 56% | 35 | 0.12 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -2.7% · 5d -2.6% | 57% | 19 | 0.10 | ✓ matches cascade |
| XLF XLF | LONG | +0.0% · 5d -1.1% ↺ fades | 55% | 35 | 0.08 | ⚠ differs |
| TRY TRY | LONG | +0.4% · 5d +1.0% | 55% | 34 | 0.06 | ⚠ differs |
| AUD AUD | SHORT | -0.4% · 5d +0.2% ↺ fades | 53% | 34 | 0.06 | ✓ matches cascade |
| COIN COIN | SHORT | -2.6% · 5d +1.7% ↺ fades | 52% | 18 | 0.04 | ✓ matches cascade |
Why this probability
Dollar-funding squeezes recur but swap-line reopening needs acute stress; calm-ish 2026 funding. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.