Traders in prediction markets and futures just pushed up the odds that the Federal Reserve will surprise markets with a rate hike at its July meeting — a development crypto investors should be watching closely.
Crowd bets move toward a hike
- On Polymarket, a leading prediction market, the implied probability that the Fed will hold rates fell 8.9 percentage points over the past 24 hours to 73.25%. The chance of a 25‑basis‑point increase rose 9.7 points to 26.65%. Polymarket has seen $100.83 million traded overall, with $5.78 million changing hands in the last day.
- Myriad, a prediction market run by Dastan (parent company of Decrypt), showed nearly identical shifts: “no change” at about 74% (down 9%) and a hike at ~27% (up 8%).
Professional markets price in still-higher odds
- Fed‑funds futures — used by professional traders to bet on the Fed’s next move — put the chance of a rate increase at roughly 37.6% on Monday afternoon, higher than it had been earlier in the month.
What a 25‑bp hike means
- A 25‑basis‑point (0.25%) hike would move the Fed’s target range from 3.50%–3.75% to 3.75%–4.00% (a basis point = 0.01 percentage point). Higher rates make borrowing more expensive, usually slowing spending and investment and putting pressure on risk assets such as Bitcoin and growth-oriented tech stocks. Conversely, rate cuts tend to boost risk assets by lowering borrowing costs.
Why markets were leaning the other way — until now
- The Fed held rates steady in June and warned inflation remained elevated; officials’ median projection put the year-end policy rate at 3.8%. June’s inflation reading later cooled to 3.5% from May’s 4.2%, which had given policymakers room to pause. The recent move in prediction markets suggests traders are re-pricing the odds that the Fed could still pivot to a hike based on incoming data or rhetoric.
Timing
- The Federal Open Market Committee meets July 28–29, with the interest-rate decision due at 2:00 p.m. Eastern on July 29. Crypto traders and investors will be watching both the decision and the Fed’s forward guidance closely — a surprise hike or even a hawkish tone could trigger volatility across digital assets.
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