What if a leveraged corporate bitcoin-treasury firm breaches covenants in a deep BTC crash?
A leveraged corporate bitcoin-treasury firm (a MicroStrategy-style holder) breaches loan covenants in a deep BTC crash, forcing coin sales and convertible-bond stress that links crypto risk to equity and HY markets.
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 6–18 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 leveraged corporate bitcoin-treasury firm (a MicroStrategy-style holder) breaches loan covenants in a deep BTC crash, forcing coin sales and convertible-bond stress that links crypto risk to equity and HY markets. The trigger decomposes into signed root‑shocks — Bitcoin ▼ · Credit spreads ▲ · Crypto confidence ▼ · Risk appetite ▼ — 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 | ▼ -6.5% hist -5.73–-0.97% · other way -7.85% (n=12) |
| 2 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -4.7% hist -17.35–+6.49% · other way -6.7% (n=11) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -3.6% hist -17.4–+4.55% · other way -5.65% (n=11) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -3.5% hist -14.18–+4.84% · other way -18.56% (n=11) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -2.5% hist -3.34–-0.64% · other way +2.5% (n=11) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.7% model prior · unmeasured |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.63–-0.01% · other way +0.57% (n=12) |
| 8 | High-yield credit HYG 📈 chart | Rate | ▼ -0.5% hist -0.47–-0.07% · other way +0.36% (n=12) |
| 9 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.5% hist -1.31–+3.21% · other way -2.32% (n=12) |
| 10 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.19–+0.14% · other way -0.89% (n=12) |
| 11 | Tech sector XLK 📈 chart | Equity | ▼ -0.4% hist -0.45–+0.5% · other way +1.07% (n=12) |
| 12 | Financials XLF 📈 chart | Equity | ▼ -0.3% hist -1.1–+0.21% · other way -0.94% (n=12) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -1.43–+0.18% · other way -0.21% (n=12) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.73–+2.57% · other way +2.32% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 31 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 |
|---|---|---|---|---|---|---|
| Bitcoin BTC | SHORT | -14.4% · 5d -8.8% | 82% | 11 | 0.59 | ✓ matches cascade |
| SOL SOL | SHORT | -11.9% · 5d -15.8% | 78% | 9 | 0.51 | ✓ matches cascade |
| ETH ETH | SHORT | -14.4% · 5d -11.7% | 70% | 10 | 0.36 | ✓ matches cascade |
| JPM JPM | SHORT | -1.1% · 5d -1.8% | 71% | 31 | 0.35 | ✓ matches cascade |
| SPX SPX | LONG | +0.3% · 5d -0.2% ↺ fades | 65% | 31 | 0.28 | ⚠ differs |
| SMH SMH | LONG | +2.3% · 5d -0.9% ↺ fades | 66% | 28 | 0.28 | ⚠ differs |
| MSTR MSTR | SHORT | -2.5% · 5d -4.9% | 66% | 28 | 0.27 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -18bp · 5d -9bp | 64% | 31 | 0.25 | · |
| XLF XLF | SHORT | -0.8% · 5d -1.1% | 61% | 28 | 0.19 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.2% · 5d +0.1% ↺ fades | 58% | 26 | 0.13 | ✓ matches cascade |
| TSM TSM | LONG | +2.4% · 5d -2.0% ↺ fades | 58% | 28 | 0.12 | ⚠ differs |
| AVGO AVGO | LONG | +2.1% · 5d -1.1% ↺ fades | 56% | 20 | 0.11 | ⚠ differs |
| US dollar DXY | LONG | +0.4% · 5d +0.1% | 56% | 31 | 0.11 | · |
| XLK XLK | LONG | +0.7% · 5d -0.7% ↺ fades | 54% | 28 | 0.07 | ⚠ differs |