What if a crypto prime broker's margin blowup forces liquidations?
A prime-broker default from a client's leveraged blowup forces cross-desk liquidations, an institutional-plumbing shock that hits BTC/ETH via forced selling and MSTR (-7.0%) via leverage. Rhymes with the Mar-2021 Archegos prime-broker unwind and the 2022 3AC default. Forward angle: crypto prime brokerage is more concentrated and less capitalized than TradFi, so a single default propagates further than Archegos did across diversified banks.
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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A crypto prime broker defaults after a client's leveraged position implodes, forcing liquidations across institutional trading desks. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ — which propagate through our causal graph to the markets below.