TL;DR
- The odds of a U.S. recession in 2025 fell from 52% to 41% on the decentralized prediction platform Polymarket after the announcement of a trade deal between the U.S. and China.
- The agreement between the two countries will significantly reduce tariffs, leading to a strong rally in the stock markets, including Dow Jones futures.
- Bitcoin surged above $105,000, driven by the optimism sparked by the agreement and the tariff reductions.
The likelihood of the U.S. entering a recession in 2025 has fallen below 50%, according to the latest movements on Polymarket, a decentralized prediction platform based on blockchain technology. This decline followed the announcement of a trade deal between the two economic giants, the U.S. and China, on Sunday. Through an agreement in Geneva, both countries agreed to reduce tariffs on each other’s goods for a period of 90 days, which generated a positive reaction in global markets.
On Polymarket, the odds of a U.S. recession dropped from 52% to 41% within 24 hours, reflecting a shift in sentiment due to the agreement. This type of betting allows users to speculate on whether the U.S. economy will experience a recession in 2025. The contracts on this platform are resolved as “Yes” if the economy experiences another quarter of negative growth or if the National Bureau of Economic Research declares a recession before January 1, 2026. With over $5 million wagered on this outcome, the platform shows how investors are betting on an economic recovery following the trade deal.
The Trade Deal and Market Recovery
The signing of the new deal between Washington and Beijing has also led to a significant rally in stock markets. Following the announcement, Dow Jones (It tracks the performance of 30 major, publicly-traded companies) futures surged more than 400 points, reflecting a positive sentiment on Wall Street. U.S. tariffs on Chinese goods will be reduced from 145% to 30%, while China will lower its tariffs on U.S. goods from 125% to 10%. This de-escalation in the trade war between the two largest economies in the world has created a favorable environment for global economic growth.
Bitcoin and Cryptocurrencies Ride the Optimism Wave
In response to the trade deal news, Bitcoin saw a strong price surge, reaching a high of $105,705. Despite a slight pullback, market indicators still show an upward trend, with a favorable Long/Short ratio for the cryptocurrency. However, the “Chaikin Money Flow” indicator shows signs of a possible bearish divergence, which could signal a correction in the short term if buying pressure weakens.
