What if retail investors in leveraged single-stock AI ETFs face cascading liquidations?
Retail investors crowded into leveraged single-stock AI ETFs and options face cascading liquidations in a selloff, amplifying volatility the way levered retail did before.
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. Retail investors crowded into leveraged single-stock AI ETFs and options face cascading liquidations in a selloff, amplifying volatility the way levered retail did before. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · AI capex ▼ · Risk appetite ▼ · Risk-parity deleveraging ▲ — 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 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -0.88–-0.25% · other way +4.19% (n=12) |
| 2 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +1.0% hist -1.64–+1.46% · other way -2.93% (n=12) |
| 3 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -1.29–+2.47% · other way +5.73% (n=12) |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.8% hist -0.55–-0.28% · other way +0.03% (n=12) |
| 5 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -3.35–+0.59% · other way -1.63% (n=12) |
| 6 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -0.55–-0.02% · other way +1.37% (n=12) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -9.74–+1.05% · other way -17.09% (n=11) |
| 8 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -1.21–+1.46% · other way +10.05% (n=12) |
| 9 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.45–-0.05% · other way +0.4% (n=12) |
| 10 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 11 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -8.1–+1.65% · other way +0.11% (n=11) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -1.26–+0.31% · other way +1.24% (n=12) |
| 13 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.26–-0.15% · other way -3.31% (n=12) |
| 14 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -1.2–+0.27% · other way +1.86% (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 | -7.7% · 5d -6.0% | 77% | 28 | 0.37 | ✓ matches cascade |
| ETH ETH | SHORT | -6.8% · 5d -5.5% | 69% | 33 | 0.29 | ✓ matches cascade |
| Gold XAU | LONG | +1.9% · 5d +0.0% | 66% | 40 | 0.27 | · |
| MU MU | SHORT | -2.6% · 5d -1.2% | 66% | 40 | 0.24 | ✓ matches cascade |
| INTC INTC | SHORT | -2.8% · 5d -2.2% | 61% | 40 | 0.20 | ✓ matches cascade |
| QCOM QCOM | SHORT | -3.1% · 5d -1.8% | 62% | 40 | 0.18 | ✓ matches cascade |
| NVDA NVDA | SHORT | -0.3% · 5d -1.6% | 62% | 40 | 0.17 | ✓ matches cascade |
| AVGO AVGO | LONG | +2.7% · 5d -1.0% ↺ fades | 60% | 38 | 0.17 | ⚠ differs |
| AMD AMD | SHORT | -0.0% · 5d -1.1% | 57% | 40 | 0.11 | ✓ matches cascade |
| SMH SMH | LONG | +0.3% · 5d -0.0% ↺ fades | 54% | 40 | 0.07 | ⚠ differs |
| MRVL MRVL | LONG | +1.1% · 5d -0.1% ↺ fades | 54% | 40 | 0.07 | ⚠ differs |
| High-yield credit HYG | LONG | +0.2% · 5d -0.1% ↺ fades | 54% | 39 | 0.07 | ⚠ differs |
| US dollar DXY | SHORT | -0.0% · 5d +0.2% ↺ fades | 54% | 40 | 0.06 | · |
| Volatility VIX | SHORT | -2.2% · 5d +4.4% ↺ fades | 51% | 40 | 0.01 | ⚠ differs |