Wall Street Loses 2.85 Trillion USD as Polymarket Degens Bet on Recession, Currently with a Probability of 49%

Speculators on Polymarket are betting large sums of money on a contract assessing the likelihood of an economic recession in the United States in 2025. After President Donald Trump’s divisive tariff policy was announced, the implied probability from market activity has risen to nearly 50%. Tariffs, Overthrow and Trade On April 2, 2025, President Trump announced the implementation of the “Liberation Day” tariffs, imposing a comprehensive 10% tax on all imported goods effective from April 5, along with retaliatory tariffs targeting nearly 90 trading partners - including China, the EU, Canada, and Mexico. While the government has stated that these measures are necessary to correct trade imbalances and combat unfair practices, economists have immediately warned about potential shocks in the global economic system.

The next day, April 3rd, the financial markets were in turmoil as the Dow Jones Industrial Average dropped sharply by 1,630 points in its worst one-day performance in years. The S&P 500 reflected this misery with its most severe decline since the volatility caused by the pandemic in 2020, while the Nasdaq Composite also experienced a sell-off of a similar magnitude. The cryptocurrency market was not immune to the effects, with the broader digital asset sector losing 5.21% of its value and bitcoin ( BTC ) specifically falling by 6.7% against the dollar.

Polymarket’s predicted market currently shows a high likelihood of recession, with $1.1 million wagered on the outcome. This likelihood was modest at 39% on March 31, then surged to 49% following the president’s announcement on Wednesday. Despite some minor fluctuations earlier today, this likelihood remains solid at 49% as of 4:30 PM ET on Thursday.

The comment section of the contract has become a battleground for political criticisms, with attacks directed at Trump supporters due to economic concerns. “Do you remember a few months ago when Kamala Yesser was mocked here for saying that Trump WOULD collapse the economy? Who’s laughing now, huh?” a particularly sarcastic participant quipped, capturing the tense mood. The U.S. stock market has lost $2.85 trillion in value today, with the S&P 500 bearing the brunt of this financial whirlwind.