What if a top-five crypto exchange collapses and freezes withdrawals?
A top-5 exchange insolvency freezing withdrawals is an FTX-style confidence shock: ETH and BTC gap down, with MSTR/COIN as the levered equity casualties and contagion to any tokens held as collateral. The direct analogue is Nov-2022 FTX, which dragged BTC under $16k and froze counterparties for weeks. Forward angle: post-FTX, proof-of-reserves and self-custody are more entrenched, so contagion may be more contained — but a venue holding native token collateral (cf. FTT) still reflexively implodes.
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 1–3 years 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 top-5 exchange is hacked/insolvent and freezes withdrawals (an FTX-style shock). The trigger decomposes into signed root‑shocks — Crypto confidence ▼ — which propagate through our causal graph to the markets below.