What if a top stablecoin like Tether breaks its peg?
A top-3 stablecoin depeg (USDT) is the systemic crypto tail: ETH leads down on higher beta, BTC takes the first liquidity hit, and levered MSTR/COIN crater as collateral chains unwind. Rhymes with the May-2022 UST/Terra collapse and the Mar-2023 USDC depeg to $0.87 during SVB — both triggered cascade liquidations. Forward angle: USDT is the dominant settlement layer for offshore perps, so a real break drains pricing liquidity itself — slippage and funding blowouts exceed the spot move.
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 mixed shock. A top-3 stablecoin (e.g. USDT) breaks its peg, triggering crypto-wide risk-off. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ — which propagate through our causal graph to the markets below.