The online betting markets are freaking out after US President Donald Trump dropped the tariff bombshell. In reaction to this, the odds of a US recession in 2025 have skyrocketed and crypto traders are pricing it in.
Polymarket, the wild west of crypto prediction markets, is now flashing a bright red warning for the economy. It is now pegging the odds of a 2025 recession at 57%. The odds are just climbing up after dipping down to 44% over the past week. However, the crypto linked prediction platform has nailed Trump’s 2024 win.
Trump’s tariffs push recession odds to 57%
Since returning to the office, Trump has been touting a Made-in-USA comeback and calling out countries that he claims have been “ripping off” America for years. In just weeks, the US has gone from a stable economic force to a source of chaos. Tariffs have been slapped on nearly everything, 25% on steel and aluminum, while 245% on Chinese imports.
As per the data shared by Polymarket, recession bets now trade at 57¢, while “no recession” sits at 43¢. The rates peaked at 64¢ for the recession coming in and 36¢ over “no recession”. The tracker has recorded the odds hitting the highest of 66% on April 9. Soon after the spike, sentiments took a dip but the uncertainty prevailed and the odds are rising again.
Source: Polymarket
Even the giants are feeling the heat, Goldman now sees a 45% recession risk and JPMorgan 60%. Meanwhile, Trump is not backing down as he recently called tariffs “medicine” and said they’ll stay until trade deficits are “cured.”
The odds for a US-China trade deal before June are hitting 38%. The chances of having a deal is trading at 38¢ while “No deal” sits at 63¢. However, traders at Polymarket believe that there are 91% chances of the Fed not changing the rates and just 8% think that a 25 bps cut might be there.
Economists slash US growth to 1.4%
Recession fears are now knocking hard on America’s door and a new Reuters poll shows economists placing the odds of a US recession in the next 12 months at nearly 50%. It went up sharply from just 25% a month ago. Trump’s 90-day pause on new tariffs hasn’t done much in this scenario.
Inflation expectations have spiked, and economists have slashed their growth forecasts. The US economy is now expected to grow just 1.4% in 2025, down from 2.2% predicted just last month. That’s the sharpest downgrade since mid-2022. Economists say the real damage is being done by uncertainty and no one wants to invest or hire when the rules of the game could change overnight. This is becoming the defining feature of Trump’s economic policy.
The global digital assets market which was over the moon when Trump stepped into the White House is suffering too. The cumulative crypto cap remained marginally up on Saturday to stand at $2.69 trillion. As of now, the biggest crypto, Bitcoin has dropped by more than 11% over the past 60 days. BTC is trading at an average price of $85,273 at press time. Its 24-hour trading volume dipped by 32% to stand at $12.4 billion.
