What if a major economy imposes a wealth tax and capital controls?
A wealth tax / capital controls in a major economy drives capital-flight hedging: gold and BTC bid as non-sovereign stores of value, DXY and the long bond soften on confidence loss, and equities derate modestly. Rhymes with the 2013 Cyprus deposit bail-in and capital controls, plus Greece's 2015 controls - both bid hard assets and crypto out of the affected jurisdiction. Forward angle: in a digital-asset era, controls leak faster via stablecoins and self-custody, so the BTC/gold bid is larger and quicker than in 2013, while the targeted market's equities and currency take the brunt.
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 3–10 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. 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 wealth tax and/or capital controls are imposed in a major economy. The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▼ · Risk appetite ▼ — 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 | ▲ +2.0% hist -2.51–+7.71% · other way +27.47% (n=12) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.6% hist +0.33–+1.1% · other way +0.37% (n=12) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.1% hist -0.24–+0.85% · other way +6.05% (n=11) |
| 4 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.8% hist -0.47–-0.19% · other way +0.89% (n=12) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.8% hist -2.64–+1.48% · other way +21.75% (n=11) |
| 6 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.7% hist -0.35–+0.72% · other way -0.88% (n=12) |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.4–+0.03% · other way +0.06% (n=12) |
| 8 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +6bp hist -9.33–+4.99% · other way +8.8% (n=12) |
| 9 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.6% hist +0.17–+0.37% · other way -0.73% (n=12) |
| 10 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +5bp hist -11.1–+5.02% · other way +9.1% (n=12) |
| 11 | Turkish lira TRY 📈 chart | FX | ▲ +0.6% hist -0.06–+0.41% · other way -0.6% (n=12) |
| 12 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.83–+0.09% · other way +1.11% (n=12) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.77–+0.12% · other way +0.04% (n=12) |
| 14 | Indian rupee INR 📈 chart | FX | ▲ +0.5% hist -0.89–+0.42% · other way -0.34% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade on DGS30/DGS10: capital controls and a wealth tax punish duration directly, so the 2011-downgrade and Cyprus windows that rallied Treasuries invert here — safe-haven mechanics flip when the issuer is the threat.
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 | -7.6% · 5d -10.6% | 83% | 20 | 0.40 | ⚠ differs |
| INR INR | SHORT | -1.0% · 5d -0.1% | 65% | 30 | 0.28 | ⚠ differs |
| 10y yield DGS10 | SHORT | -12bp · 5d -4bp | 64% | 39 | 0.25 | ⚠ differs |
| NVDA NVDA | SHORT | -3.5% · 5d -4.4% | 69% | 31 | 0.25 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -11bp · 5d -2bp | 64% | 38 | 0.24 | ⚠ differs |
| ETH ETH | SHORT | -5.9% · 5d -9.4% | 63% | 22 | 0.18 | ⚠ differs |
| SMH SMH | SHORT | -0.7% · 5d -1.1% | 60% | 31 | 0.16 | ✓ matches cascade |
| COIN COIN | SHORT | -2.9% · 5d -5.0% | 57% | 20 | 0.12 | ⚠ differs |
| US dollar DXY | LONG | +0.1% · 5d +0.4% | 56% | 39 | 0.11 | ⚠ differs |
| KRW KRW | SHORT | -1.1% · 5d -0.2% | 56% | 30 | 0.10 | ⚠ differs |
| TRY TRY | SHORT | -0.3% · 5d +0.7% ↺ fades | 56% | 30 | 0.09 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.0% · 5d -0.1% | 56% | 30 | 0.08 | · |
| Bitcoin BTC | SHORT | -0.7% · 5d -4.3% | 55% | 23 | 0.07 | ⚠ differs |
| USDJPY USDJPY | SHORT | -0.5% · 5d -0.4% | 52% | 33 | 0.04 | ✓ matches cascade |
Why this probability
Wealth tax/capital controls imposed in major economy rare; political resistance high even over 3-10yr. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.