Polymarket Odds Show 87% Chance of December Fed Rate Cut as Crypto Stocks Rally

Introduction: A Surge in Market Sentiment

In a significant shift of market expectations, prediction market platform Polymarket is now indicating an 87% probability of a U.S. Federal Reserve interest rate cut in December, reaching its highest level this month. This surge in sentiment has catalyzed a notable rally across crypto-linked equities. Leading Bitcoin miners Cleanspark, Riot Platforms, and Cipher Mining posted substantial gains, while Circle, the issuer of the USDC stablecoin, saw its stock jump nearly 10% in early trading. This confluence of events underscores the crypto market's heightened sensitivity to macroeconomic monetary policy and the growing influence of prediction markets in shaping investor expectations. The rally extended to Bitcoin itself, which was up around 7% on the week after a recent dip, according to CoinGecko data.

The Crypto Stock Rally: Miners and Stablecoin Issuers Lead the Charge

The immediate market reaction to the shifting rate cut odds was most visible in the performance of publicly traded crypto companies. Data from Yahoo Finance highlighted a strong session for several key players.

• Bitcoin Miners: Three U.S.-listed Bitcoin miners were at the forefront of the rally. Cleanspark, Riot Platforms, and Cipher Mining all registered significant increases, with each showing double-digit gains over the preceding five-day period. These companies are particularly sensitive to interest rate expectations, as lower rates can reduce capital costs for expansion and improve profitability margins.
• Stablecoins and Exchanges: Circle, the company behind the USDC stablecoin, experienced a sharp rise of nearly 10% in early trading. Other major crypto entities, including Michael Saylor’s MicroStrategy and the exchange Coinbase, also notched more modest increases at the time of writing. This broad-based uptick reflects a market-wide reassessment of the regulatory and operational environment for crypto businesses in a potential lower-rate climate.

The Volatile Path to 87%: A Tale of Two Fed Officials

The journey to the current 87% probability on Polymarket has been marked by significant volatility, driven primarily by public comments from Federal Reserve officials. The pricing on prediction markets has acted as a real-time barometer of investor interpretation of Fed rhetoric.

• The Hawkish Pivot: On October 29, Fed Chair Jerome Powell stated that a December rate cut was “not a foregone conclusion.” Investors interpreted this remark as hawkish, suggesting the Fed was prepared to maintain tight monetary conditions for longer. This sentiment caused the Polymarket odds to plummet from 89% the day before Powell's comments to a low of 22% by November 20.
• The Dovish Reversal: The trend reversed decisively on November 17 following comments from Fed Governor Christopher Waller. He argued that the central bank should consider cutting rates next month, citing that “the labor market is still weak and near stall speed” and that inflation is now “relatively close” to the Fed’s 2% target. This dovish perspective reignited market optimism, pushing Polymarket odds back up to their current elevated level.

The Rise of Prediction Markets: From Niche to Mainstream

The data from Polymarket that fueled this market move is part of a broader trend: prediction markets are rapidly expanding their reach and influence within the financial and entertainment landscapes.

• Polymarket's Strategic Partnerships: On November 13, Polymarket secured a multi-year agreement with TKO Group Holdings to become the official prediction-market partner for the Ultimate Fighting Championship (UFC) and Zuffa Boxing. This followed shortly after a partnership with North American fantasy sports operator PrizePicks, signaling a push into mainstream sports and entertainment.
• Kalshi's Funding and Growth: Competitor Kalshi has also demonstrated massive growth. A TechCrunch report, citing a person familiar with the deal, stated that Kalshi raised $1 billion from Sequoia Capital and CapitalG, pushing its valuation to $11 billion. This new round followed a $300 million raise in October.
• Brokerage Adoption: The integration of these platforms into traditional finance is accelerating. On Wednesday, Robinhood reported that prediction markets have quickly become one of its fastest-growing revenue drivers. Through a partnership with Kalshi, more than one million Robinhood users have traded nine billion contracts since the product launched in March.

Coinbase's Potential Entry and Market Implications

The sector's growth may be on the verge of another major expansion with the potential entry of a leading crypto exchange. On November 19, tech researcher Jane Manchun Wong posted screenshots of an unreleased site, indicating that Coinbase is developing its own prediction-market platform. The images suggested the product would be offered through Coinbase Financial Markets and would be backed by Kalshi. While Coinbase has not officially confirmed these developments, the move would represent a significant endorsement of the prediction market model by a major player in the digital asset industry.

Conclusion: A New Macroeconomic Feedback Loop for Crypto

The events of the past month illustrate a critical evolution in how cryptocurrency markets interact with traditional finance and macroeconomic policy. The 87% chance of a December rate cut on Polymarket is more than just a statistic; it is a powerful sentiment indicator that directly influences trading behavior in crypto stocks and potentially digital assets like Bitcoin.

This creates a new feedback loop: Fed communications influence prediction market odds, which in turn drive volatility and rallies in crypto-linked equities, highlighting their status as high-beta plays on macroeconomic sentiment. The simultaneous surge of platforms like Polymarket and Kalshi, backed by substantial venture capital and integrated into mainstream brokerages, confirms that these markets are becoming entrenched tools for gauging real-world probabilities.

For professional crypto readers, the key takeaway is the need to monitor these prediction markets with the same diligence as traditional economic indicators. The volatility following comments from Powell and Waller shows how quickly narratives can shift. Moving forward, market participants should watch for:

1. Further commentary from Federal Reserve officials ahead of the December meeting.
2. The continued adoption and partnership announcements from prediction market platforms.
3. Official confirmation from Coinbase regarding its rumored prediction market product.

The convergence of decentralized prediction markets, traditional equities, and monetary policy marks a new chapter in market analysis, one where crowd-sourced probability increasingly acts as a catalyst for price discovery across asset classes.