Chances of the Fed cutting US interest rates is 95%, according to the Polymarket market

Source: PortaldoBitcoin Original Title: Chances of Fed cutting US interest rates at 95%, according to Polymarket Original Link: The betting market on Polymarket is indicating a 95% chance that the Federal Reserve (Fed) will cut the US benchmark interest rate by 25 basis points. The central bank meeting will take place this Wednesday (10) and marks the last meeting of the year.

The bet has already accumulated $296 million in liquidity, and the 25 basis point cut option offers little return due to high demand: the “Yes” action costs $0.95 and pays $1, generating a profit of $0.05.

Next, the alternative with the most participation is “No change” to the interest rate. Bettors assign a 6% probability to this scenario. The “Yes” action costs $0.06 and pays $1 (return of $0.94).

With a 1% chance is the option of a 50 basis point cut, with the “Yes” action costing $0.07 and paying $1 (profit of $0.93).

Finally, the least likely possibility — with less than 1% — is a 25 basis point increase. In this case, the “Yes” action costs $0.01 and pays $1 (profit of $0.99).

What low interest rates mean for crypto

Higher interest rates make government bonds and other fixed income products more attractive, because their yields tend to rise along with the benchmark rate. This typically reduces appetite for higher-risk assets like stocks and cryptocurrencies.

On the other hand, lower interest rates decrease the attractiveness of these conservative investments. With lower returns in fixed income, investors start looking for alternatives capable of offering greater appreciation potential — including risk assets. That’s why the crypto market closely follows Fed decisions: a rate cut can facilitate liquidity, improve risk appetite, and boost the price of Bitcoin and other blockchain-based assets.