Several crypto-linked stocks experienced an upward trend on Friday, coinciding with a significant surge in prediction-market odds for a December interest rate cut. On Polymarket, the probability of a rate cut in December reached 87%, marking the highest level observed this month.
Leading the rally were three US-listed Bitcoin miners: Cleanspark, Riot Platforms, and Cipher Mining. All three stocks saw gains during the session, and collectively, they have achieved double-digit increases over the past five days.
Data from Yahoo Finance indicated that Circle, the issuer of USDC, experienced a jump of nearly 10% in early trading. Michael Saylor's MicroStrategy and Coinbase also saw modest increases by the time of writing.
Bitcoin (BTC) also showed strength, with a weekly increase of around 7%. This rise followed a dip to approximately $82,000 on November 21, according to CoinGecko data.
The volatility observed in prediction-market pricing throughout November has been largely influenced by statements from Federal Reserve officials.
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 might delay rate cuts and maintain tight monetary conditions. Consequently, Polymarket odds declined from 89% the previous day to as low as 22% by November 20.
Investor sentiment shifted on November 17, following remarks by Fed Governor Christopher Waller. Waller suggested that the central bank should consider cutting rates in the following month, citing a weakening labor market and inflation that is now "relatively close" to the Fed's 2% target.
Prediction Markets Gain Traction Amidst Surging Demand
Prediction markets, including platforms like Kalshi and Polymarket, which allow users to wager on the outcomes of real-world events, have significantly expanded their reach and influence this year.
On November 13, Polymarket announced a multi-year agreement with TKO Group Holdings to become the official prediction-market partner for the Ultimate Fighting Championships and Zuffa Boxing. This partnership followed an earlier collaboration with North American fantasy sports operator PrizePicks.
In the same month, Kalshi secured $1 billion in funding from Sequoia Capital and CapitalG, propelling its valuation to $11 billion, as reported by TechCrunch, citing a source familiar with the deal. This latest funding round came after a $300 million raise in October.
Rumors surfaced on November 19 suggesting that Coinbase is developing its own prediction-market platform. These rumors were fueled by screenshots of an unreleased site posted by tech researcher Jane Manchun Wong. Wong's images indicated that the product would be offered through Coinbase Financial Markets and supported by Kalshi.
On Wednesday, Robinhood reported that prediction markets have rapidly become one of its fastest-growing revenue drivers. The platform has seen over one million users trade nine billion contracts since the product's launch in March, facilitated through a partnership with Kalshi.