What if a Tether redemption run jolts funding markets?
A Tether redemption run forces liquidation of T-bills and CP, jolting short-term funding and cratering ETH (-8.1%) as the dominant offshore-liquidity token; the financial-conditions tightening is the real-world transmission channel. Rhymes with the Sep-2008 Reserve Primary money-fund 'breaking the buck' that froze CP markets. Forward angle: Tether's reserves are now mostly T-bills, so the funding-market jolt is more concentrated in bills than the 2008 CP freeze.
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. Heavy institutional USDT redemptions force Tether to liquidate commercial paper and T-bills, jolting short-term funding markets. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ · Financial conditions ▲ — which propagate through our causal graph to the markets below.