Crypto Stocks Soar as December Rate Cut Hopes Rise

The crypto world is buzzing with excitement as the chances of a December interest rate cut climb to 87% on Polymarket. This surge in optimism has given a big boost to several crypto-related stocks. Three major Bitcoin mining companies, Cleanspark, Riot Platforms, and Cipher Mining, are leading the charge. Their stocks have seen impressive gains, with double-digit increases over the past five days. Even Circle, the company behind USDC, jumped nearly 10% in early trading. Michael Saylor’s Strategy and Coinbase also saw some growth, though not as dramatic. Bitcoin itself has had a rollercoaster week. After dropping to around $82, 000 on Nov. 21, it has since rebounded, showing a 7% increase over the past week. The ups and downs in the prediction markets have been heavily influenced by what Federal Reserve officials say. On Oct. 29, Fed Chair Jerome Powell hinted that a December rate cut wasn’t guaranteed. This caused the odds on Polymarket to drop from 89% to as low as 22% by Nov. 20. But then, on Nov. 17, Fed Governor Christopher Waller changed the mood. He suggested that the Fed should consider cutting rates next month, pointing to a weak labor market and inflation nearing the Fed’s 2% target. This shift in sentiment has brought the odds back up to 87%. Prediction markets like Polymarket and Kalshi are gaining more attention and influence. These platforms let people bet on real-world events, and they’ve been expanding rapidly. Polymarket recently teamed up with TKO Group Holdings to be the official prediction-market partner for the Ultimate Fighting Championships and Zuffa Boxing. They also partnered with PrizePicks, a North American fantasy sports operator. Kalshi has also seen significant growth, raising $1 billion from Sequoia Capital and CapitalG, pushing its valuation to $11 billion. This follows a $300 million raise in October. There are even rumors that Coinbase is developing its own prediction-market platform, with tech researcher Jane Manchun Wong posting screenshots of an unreleased site. Robinhood has also jumped on the bandwagon, reporting that prediction markets have become one of its fastest-growing revenue drivers. Since launching in March through a partnership with Kalshi, more than one million users have traded nine billion contracts.