What if a stablecoin redemption wave triggers a Treasury-bill fire sale?
A multi-billion stablecoin redemption forcing rapid T-bill liquidation jolts the front end and breaks crypto first — ETH and BTC gap as the on-chain dollar plumbing wobbles. Rhymes with the March-2023 USDC depeg (Circle's SVB exposure), when USDC hit $0.87 and ETH/BTC sold off until the banking backstop. Forward angle: Tether/Circle reserves are now large enough that a forced bill sale is a genuine front-end event — watch bill yields and the basis, not just the coin's peg.
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 multi-billion stablecoin redemption wave forces rapid liquidation of its Treasury-bill reserves, jolting the front end of the curve. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Fed policy path ▲ · Financial conditions ▲ — 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 | ▼ -8.6% hist -5.47–-1.91% · other way +3.0% (n=12) |
| 2 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -7.4% hist -14.17–+1.88% · other way +2.19% (n=9) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -4.8% hist -15.24–+1.59% · other way -5.17% (n=9) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -5.1% hist -4.18–-2.38% · other way -3.27% (n=9) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -3.2% hist -3.52–+2.4% · other way +3.13% (n=7) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -2.2% model prior · unmeasured |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.76–-0.08% · other way +1.43% (n=12) |
| 8 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.54–+0.12% · other way +2.41% (n=12) |
| 9 | High-yield credit HYG 📈 chart | Rate | ▼ -0.4% hist -0.37–-0.08% · other way -0.24% (n=11) |
| 10 | Financials XLF 📈 chart | Equity | ▼ -0.4% hist -0.92–+0.15% · other way -0.49% (n=12) |
| 11 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -1.19–+3.08% · other way -3.68% (n=12) |
| 12 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.4% hist -0.9–+0.18% · other way -0.35% (n=12) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.3% hist -0.44–+-0.0% · other way +2.06% (n=12) |
| 14 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.3% hist -0.11–+0.67% · other way +0.15% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on XAU: thin n=11 with a contradictory Cyprus -15% versus Lehman +13% makes the sign unstable, and near-ATH gold faces a T-bill-curve shock, not a haven bid.
Historical precedent — what analogous events actually did
Across 39 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 |
|---|---|---|---|---|---|---|
| Bitcoin BTC | SHORT | -11.4% · 5d -8.1% | 76% | 17 | 0.50 | ✓ matches cascade |
| COIN COIN | LONG | +4.0% · 5d +0.8% | 69% | 13 | 0.32 | ⚠ differs |
| KRW KRW | SHORT | -1.1% · 5d +0.2% ↺ fades | 66% | 34 | 0.30 | ✓ matches cascade |
| ETH ETH | SHORT | -9.5% · 5d -9.8% | 67% | 15 | 0.28 | ✓ matches cascade |
| MRVL MRVL | SHORT | -0.5% · 5d -3.3% | 67% | 35 | 0.28 | ✓ matches cascade |
| MSTR MSTR | SHORT | -1.4% · 5d -4.0% | 64% | 35 | 0.24 | ✓ matches cascade |
| JPM JPM | SHORT | -0.8% · 5d -1.4% | 65% | 39 | 0.24 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -10bp · 5d -6bp | 62% | 39 | 0.23 | ⚠ differs |
| 10y yield DGS10 | SHORT | -10bp · 5d -7bp | 59% | 39 | 0.16 | ⚠ differs |
| GBPUSD GBPUSD | SHORT | -0.3% · 5d -0.0% | 58% | 34 | 0.14 | ✓ matches cascade |
| XLF XLF | SHORT | -0.7% · 5d -0.9% | 58% | 35 | 0.13 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.1% · 5d +0.1% ↺ fades | 57% | 32 | 0.11 | ✓ matches cascade |
| SMH SMH | LONG | +1.3% · 5d -1.0% ↺ fades | 56% | 35 | 0.11 | ⚠ differs |
| US dollar DXY | LONG | +0.5% · 5d +0.1% | 55% | 39 | 0.09 | ✓ matches cascade |
Why this probability
Large stablecoin redemption possible; reserves now T-bill-heavy and liquid, front-end jolt modest. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.