What if Risk-parity de-lever sweeps crypto into a cross-asset flush?
A volatility spike triggers systematic risk-parity de-leveraging that indiscriminately sells liquid assets including BTC, deepening a correlated drawdown.
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 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. 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. A volatility spike triggers systematic risk-parity de-leveraging that indiscriminately sells liquid assets including BTC, deepening a correlated drawdown. The trigger decomposes into signed root‑shocks — Bitcoin ▼ · Volatility (VIX) ▲ · Crypto confidence ▼ · 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 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -4.3% hist -3.54–+0.38% · other way -5.96% (n=12) |
| 2 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -3.2% hist -10.73–+1.4% · other way -3.85% (n=12) |
| 3 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -2.4% hist -7.01–+0.62% · other way -15.5% (n=12) |
| 4 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -2.4% hist -3.57–+0.16% · other way -3.27% (n=12) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -1.6% hist -1.22–+0.02% · other way +6.46% (n=12) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.3% model prior · unmeasured |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.8% hist -0.68–-0.18% · other way -0.02% (n=12) |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.8% hist -2.66–+1.54% · other way +2.0% (n=12) |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.28–+0.2% · other way +0.34% (n=12) |
| 10 | Tech sector XLK 📈 chart | Equity | ▼ -0.5% hist -0.44–+0.09% · other way +0.57% (n=12) |
| 11 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -0.57–+1.05% · other way +1.35% (n=12) |
| 12 | High-yield credit HYG 📈 chart | Rate | ▼ -0.2% hist -0.2–+0.19% · other way +0.08% (n=12) |
| 13 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.55–+0.74% · other way -0.46% (n=12) |
| 14 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.28–+0.24% · other way +6.59% (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 | -5.2% · 5d -10.7% | 71% | 23 | 0.32 | ✓ matches cascade |
| MU MU | SHORT | -3.1% · 5d -1.7% | 70% | 40 | 0.31 | ✓ matches cascade |
| ETH ETH | SHORT | -8.1% · 5d -9.2% | 68% | 28 | 0.29 | ✓ matches cascade |
| SPX SPX | LONG | +0.4% · 5d -0.8% ↺ fades | 62% | 40 | 0.23 | ⚠ differs |
| Gold XAU | LONG | +0.9% · 5d +-0.0% ↺ fades | 59% | 39 | 0.17 | · |
| SMH SMH | LONG | +1.2% · 5d +0.2% | 59% | 39 | 0.15 | ⚠ differs |
| High-yield credit HYG | LONG | +0.3% · 5d -0.1% ↺ fades | 58% | 38 | 0.12 | ⚠ differs |
| AVGO AVGO | LONG | +1.6% · 5d -0.8% ↺ fades | 56% | 37 | 0.11 | ⚠ differs |
| Volatility VIX | SHORT | -2.9% · 5d +3.4% ↺ fades | 56% | 39 | 0.10 | ⚠ differs |
| XLF XLF | SHORT | -0.5% · 5d -0.3% | 56% | 39 | 0.10 | ✓ matches cascade |
| TSM TSM | LONG | +0.7% · 5d -0.3% ↺ fades | 56% | 39 | 0.09 | ⚠ differs |
| MRVL MRVL | LONG | +1.5% · 5d -0.7% ↺ fades | 56% | 39 | 0.09 | ⚠ differs |
| NDX NDX | SHORT | -0.2% · 5d -1.3% | 54% | 40 | 0.06 | ✓ matches cascade |
| US dollar DXY | SHORT | -0.2% · 5d +0.1% ↺ fades | 54% | 40 | 0.06 | · |