Polymarket whales bet on Fed rate cut action

Polymarket has almost resolved the issue of the upcoming Fed interest rate decision. However, whales became active in the past day, for a last-minute round of speculation. 

The Polymarket prediction pair for the Fed decision in July turned into one of the most active markets. The pair reached over $124M in trading volumes, with additional bets just hours before the FOMC decision is announced. 

The July Fed decision is the leading trending pair on Polymarket at the end of July. The platform has once again switched to current events and politics as its most widely visited and active pairs. 

The US Fed will most likely keep the rates steady at their current 4.25%-4.5% range. The Polymarket prediction pair grants 97% probability, based on whale and retail bets, with only 3% for a 25 basis point rate cut. 

One Polymarket whale makes an asymmetric bet on rate cut

One whale made an asymmetric bet on a rate cut, with a position valued at $24,518.25. The whale may earn up to $621K in the improbable event of a rate cut. 

However, the whale has a track record of losses in the past month, and has a loss of over 72K, not inspiring confidence in being smarter than the crowd. The bet is seen as irrationally risky, potentially a way for trader SaylorMC to send a message. 

SaylorMC is the second-biggest holder of tokens representing a rate cut, surpassed by another whale with 718,590 shares representing a rate cut. In total, rate cut supporters have built significant positions in the past day, betting on a rogue rate cut. 

Whales keep betting on rate stability

Even as the market was almost resolved with 97% to 99.5% probability, some whales used the last moment to open positions. Buying the token before the resolution can guarantee a small upside from the bets. 

The well-known whale bobe2, with a total of 554 predictions on various markets, opened a position to bet on unchanged rates. The whale placed $2.25M for 2.31M of ‘No’ tokens, standing for a small gain when the market resolves. The whale also placed a risky bet on a rate cut, for a smaller position of $144.7K. 

Another whale known as Spice put $1.3M earlier, betting on unchanged rates, as the position has grown to $1.6M. Spice has been tracked for an extraordinary track record of earning over $176K from only 51 prediction markets, and is seen as a strong indicator of probable outcomes. 

The last two whales added to the expectations of no rate cut, based on their conviction and sizable bets. For now, the only thing attractive about the rate cut position is the 50X payback odds. 

As the July prediction market is closing, volumes are turning to the September FOMC prediction. That market already accrued $5.29M in volumes, with several shifts in sentiment. Currently, the early predictions envision a rate cut during Fed’s September meeting, with 56% odds of a 25 basis points cut. 

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