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A Polymarket trader, going by the alias YatSen, has placed three different bets on interest rate cuts by the Federal Reserve, guaranteeing themselves a $500,000 profit.
What Happened: The trader is currently trading in the green on all his bets with the highest (+78.5%) gains on a 25-basis point slash. It is followed by 26.8% gains in a 50-basis point fall and a 1.2% gain in the overall interest rate cut.
The total value of his bets are as follows: a $937,877 bet that the Federal Reserve will cut interest rates by Sep.18 a $623,250 bet for a 50 basis points cut and a $913,898 bet for a 25 basis points drop.
That means the trader will profit $500,000 in case the Federal Reserve cuts 25 or 50 basis points, an outcome seen as assured by the markets.
The Federal Reserve's decision has kept market participants on edge, with a rate cut seen as practically assured. The size of the cut is more contentious.
Polymarket data shows a 53% chance the Fed will reduce interest rates by 25 basis points (bps) and a 47% chance is attributed to a more aggressive 50 bps reduction. Over $15 million have been traded on these two options alone, with the entire market racking up a trading volume of over $55 million.
This massive bet is set against a backdrop of heightened expectations as investors eagerly await the Fed's next move.
Bitcoin (CRYPTO: BTC) is trading lower by 1.8% at $59789, while Ethereum (CRYPTO: ETH) is 2.7% down at $2,300, reflecting broader market caution as uncertainty looms.
What’s Next: This tension between market expectations and individual bets will be a key point of discussion at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders will explore how macroeconomic factors like interest rate cuts are influencing the broader digital assets and crypto markets.
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Image: Shutterstock
