What if a big institutional prime money-market fund breaks the buck?
A prime MMF breaking the buck triggers gates and a dash from prime to government funds, draining CP/funding and forcing a broad de-risk — highest-beta crypto (SOL) and HY credit lead lower while VIX bids. Exact analogue is Reserve Primary breaking the buck in Sept 2008, which froze CP and forced the Fed's MMF backstop. Prime funds fund bank/corporate short-term paper; their flight starves issuers of rollover. Forward angle: post-2016 reform floating NAV and 2020's MMLF playbook mean the Fed reacts within days — but the reflex sell-off in crypto and HY comes first.
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 Tail risk 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. A large institutional prime money-market fund's NAV falls below $0.995, triggering gates, fee hikes, and a system-wide dash to government funds. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.