What if EM peg break forces a maxi-devaluation and capital controls?
An untenable peg snaps, triggering a maxi-devaluation and emergency capital controls; the disorderly adjustment hits local assets and spreads contagion across the high-beta EM complex.
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. An untenable peg snaps, triggering a maxi-devaluation and emergency capital controls; the disorderly adjustment hits local assets and spreads contagion across the high-beta EM complex. The trigger decomposes into signed root‑shocks — EM currencies ▼ · Volatility (VIX) ▲ · FX carry appetite ▼ · Credit spreads ▲ · 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 | Turkish lira TRY 📈 chart | FX | ▼ -1.1% hist -4.62–+0.88% · other way -0.66% (n=12) |
| 2 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +1.1% hist -3.29–+1.88% · other way -7.07% (n=12) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -7.75–+0.99% · other way +23.24% (n=12) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.9% hist -12.3–+2.07% · other way -3.1% (n=10) |
| 5 | Indian rupee INR 📈 chart | FX | ▼ -0.9% hist -1.49–+0.02% · other way -0.75% (n=12) |
| 6 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -1.38–+0.03% · other way +0.63% (n=12) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.8% model prior · unmeasured |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -12.44–+1.13% · other way +2.79% (n=11) |
| 9 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -5.19–+1.35% · other way +9.75% (n=11) |
| 10 | High-yield credit HYG 📈 chart | Rate | ▼ -0.7% hist -0.6–-0.12% · other way -0.23% (n=12) |
| 11 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.56–+1.13% · other way +0.24% (n=12) |
| 12 | Chinese yuan CNY 📈 chart | FX | ▼ -0.5% hist -0.72–-0.01% · other way -0.55% (n=12) |
| 13 | Financials XLF 📈 chart | Equity | ▼ -0.5% hist -0.3–-0.17% · other way -0.27% (n=12) |
| 14 | Tech sector XLK 📈 chart | Equity | ▼ -0.5% hist -0.45–-0.09% · other way +0.75% (n=12) |
Probable recommendation
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 | -10.1% · 5d -7.8% | 81% | 16 | 0.52 | ✓ matches cascade |
| ETH ETH | SHORT | -9.8% · 5d -6.0% | 77% | 22 | 0.43 | ✓ matches cascade |
| MSTR MSTR | SHORT | -6.1% · 5d -2.3% | 72% | 39 | 0.36 | ✓ matches cascade |
| INR INR | SHORT | -1.0% · 5d -0.0% | 68% | 38 | 0.33 | ✓ matches cascade |
| CNY CNY | SHORT | -0.4% · 5d -0.2% | 66% | 38 | 0.31 | ✓ matches cascade |
| TRY TRY | SHORT | -3.7% · 5d -0.1% | 63% | 38 | 0.26 | ✓ matches cascade |
| NDX NDX | SHORT | -0.9% · 5d -1.0% | 65% | 40 | 0.25 | ✓ matches cascade |
| SPX SPX | LONG | +1.3% · 5d -0.2% ↺ fades | 65% | 40 | 0.25 | ⚠ differs |
| AVGO AVGO | LONG | +2.1% · 5d -1.6% ↺ fades | 63% | 38 | 0.25 | ⚠ differs |
| Bitcoin BTC | SHORT | -4.4% · 5d -4.4% | 62% | 29 | 0.21 | ✓ matches cascade |
| MRVL MRVL | SHORT | -0.2% · 5d -2.4% | 62% | 39 | 0.21 | ✓ matches cascade |
| AUD AUD | SHORT | -0.5% · 5d -0.5% | 61% | 38 | 0.18 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.2% · 5d -0.1% | 61% | 38 | 0.16 | ✓ matches cascade |
| JPM JPM | SHORT | -0.4% · 5d -1.1% | 59% | 40 | 0.15 | ✓ matches cascade |