This Week in Prediction Markets: Polymarket Predicts CZ’s Sentence, CFTC Considers Ban, and Fed Rate Cuts

This week in prediction markets:

Binance’s founder and former CEO, Changpeng “CZ” Zhao, is facing a sentencing hearing in a U.S. court in Seattle, with the Department of Justice recommending a three-year prison term. However, bettors on the Polymarket platform are predicting a much shorter sentence for CZ, with trading levels indicating a high likelihood that he will be out in less than two years.

Despite the DOJ’s recommendation, traders are banking on letters of support from prominent figures, including former U.S. Ambassador to China Max S. Baucus and members of the ruling family in the United Arab Emirates, to sway the judge towards a more lenient sentence.

CFTC vs. political bets

The U.S. Commodity Futures Trading Commission is considering a ban on derivatives for betting on U.S. elections, as well as potentially restricting other event contracts. This comes amidst a surge in interest in election betting, with nearly $117 million bet on a Polymarket contract about the outcome of the general election.

While election betting is illegal in many states, online platforms like Polymarket and PredictIt have found ways to operate within the confines of the law, albeit with certain limitations and restrictions.

Will U.S. interest rates drop below 5.25%?

Fears of stagflation have led to speculation about the Federal Reserve cutting interest rates, with predictions on the Kalshi platform indicating a high probability of rate cuts in the near future. The hive mind suggests a 62% chance of rates dropping below 5.25%, with a 36% chance of them falling below 5%.

As the traditional finance and crypto markets brace for potential rate cuts, all eyes are on the Fed’s next move and how it will impact the economy.

Overall, the prediction markets are buzzing with activity and anticipation as key events unfold and traders place their bets on the outcomes.