Washington's "Shutdown Roulette": How can capital make a huge profit on liquidity spreads with a 54% probability when the political clock is intentionally slowed down?

The prediction market suddenly raised the probability of the 'government's restart being postponed until after December 16' to 54%. This is not a failure of polling, but rather a signal from real money arbitrage. This article dissects three hidden dollar 'dark channels' - TGA flooding, RRP exhaustion, and BTFP lifeline - and provides a cross-market arbitrage map between crypto and U.S. Treasuries; when the political deadlock becomes an open script, those who first understand the liquidity timetable will be able to reap profits in the next round of dollar 'floods'.

1. 54%: It's not a prediction, it's a "Dollar Voting Machine"

Polymarket and Kalshi, two major prediction markets, have added $180 million in betting funds over the past 48 hours, raising the probability of the “>16 restart” from 34% to 54%.

The key is not who has the inside information, but rather:

1. 62% of the betting pool is composed of registered market maker accounts (labels include Jump, Cumberland), who are simultaneously building long positions in SOFR futures - they are not betting on events, but on the liquidity return triggered by the events.

2. Postponement = The Ministry of Finance continues to "be frugal with spending" → TGA at a high level → Bank reserves being drained → Short-term interest rates jump → Fed forced to inject Liquidity, this is the core of arbitrage.

Conclusion: 54% is the implied volatility of the "US Dollar Liquidity Call Option," rather than simply political odds.

2. The "Liquidity Triangle" of Political Stalemate: TGA, RRP, BTFP

Variables Current Status Impact of Suspension Continuation Capital Strategies

TGA $152 billion (two weeks + $90 billion) Unable to spend → Continue drawing Advance stocking SOFR 3M futures long

RRP $420 billion (yearly low) Fiscal bond issuance + TGA replenishment will double the bloodletting Betting on RRP < $200 billion triggers repo rate surge

BTFP Has expired but bank discount window usage rises Political deadlock increases the probability of the Fed restarting "implicit QE" Long-end U.S. Treasury bond call options, ETH/BTC simultaneously built long positions

Logic Chain:

Postponement → TGA remains high → Reserves fall below 27 trillion → SOFR breaks 5% → Fed restarts tools → Liquidity flood peak → Risk assets rebound violently.

3. Cross-Market Arbitrage Matrix: How to Turn 54% Probability into Cash

1. US Treasury Bonds

• Buy 2-year U.S. Treasury futures (TU) + Sell 10-year (ZN) to create a steep curve, target spread +30bp;

• Cost: Approximately $3,700 margin per contract; Profit and loss ratio 4:1.

2. Short-term interest rate

• SOFR 3M futures opening price 94.60 (implied interest rate 5.40%), target 95.00 (interest rate 4.60%), single contract profit 400 USD/contract.

3. Crypto High β

• Suspension continuation period: ETH/BTC exchange rate 0.052→0.048 retracement, short position hedge;

• Restart of the flood discharge period: Replacing positions L2 (OP, STRK) with ETH elasticity 3:1, leverage within 1.5 times.

4. Options Enhancement

• Expiring on December 29th, ETH 3500 straddle, IV expected to rise from 48% to 65%, cost 3.8%, profitable if it breaks above 3800 or falls below 3200.

4. Timeline: The four "mines" that must be closely monitored in the next three weeks.

1. The "blind flying" period after the CPI interruption on December 12: If the SOFR jumps >20bp during the day, the probability of an emergency Fed repurchase increases by 30%;

2. On December 14, the House Rules Committee released the text of the temporary appropriations bill—any delay provisions would be instantaneously priced in by the prediction markets;

3. December 16th, the Treasury's refinancing statement: If the TGA target is set at 750 billion, it will be equivalent to announcing a "withdrawal of 300 billion", the market first dropped in respect;

4. December 18 FOMC: As long as the dot plot hints at a rate cut in Q2 2025 + a slowdown in QT, liquidity trading will be fully triggered.

5. Tail risk: When 54% becomes 100%, what is left?

• Debt ceiling "bundling": If the restart bill fails to be packaged with the extension of the ceiling, the probability of a technical default will surge → dollar swap basis points will spike, short-term U.S. Treasury bonds may instead soar, and cryptocurrencies will drop before rising, with volatility amplifying.

• Hedge plan:

• Buy 1 period USD 1y CDS call option, nominal 500,000 to hedge against default jump;

• Sync crypto position to buy 90% out-of-the-money put options (ETH 2900 Put), Δ≈0.1, cost 0.25%, to prevent Liquidity mispricing.

6. Conclusion: The political clock ticks slower, while the capital clock ticks faster.

A government shutdown is not "inaction", but rather a man-made shortage of dollars; when politicians slow down the clock, Wall Street has already maxed out the stopwatch. A 54% probability of delay is just an appetizer, the real main course is the flood of dollars brought by "TGA flood release + RRP bottoming out".

Remember: In liquidity games, the outcome of events is not important; the direction of liquidity is what matters. Whoever first understands the sound of dollars behind the political noise will be able to seize the front row seats in the next round of asset frenzy. #GateWeb3LaunchpadBOB上线 #广场发币瓜分千U奖池 #加密市场回调