Wall Street Bleeds $2.85T as Polymarket Degens Bet on Recession, Now a 49% Probability

Speculators on Polymarket are wagering substantial sums on a contract gauging the likelihood of a U.S. economic downturn by 2025. After President Donald Trump’s divisive tariff policy was announced, the probability implied by market activity has risen to nearly 50%.

Tariffs, Tumbles and Trades

On April 2, 2025, President Trump declared the implementation of “Liberation Day” tariffs, enacting a sweeping 10% duty on all imported goods effective April 5, accompanied by countervailing tariffs targeting nearly 90 trading partners – including China, the EU, Canada, and Mexico. While the administration framed these measures as necessary to correct trade imbalances and combat unfair practices, economists immediately warned of potential shockwaves through the global economic system.

The following day, April 3, financial markets reeled as the Dow Jones Industrial Average plummeted 1,630 points in its worst single-day performance in years. The S&P 500 mirrored this distress with its most severe decline since the pandemic-induced volatility of 2020, while the Nasdaq Composite experienced a parallel rout of similar magnitude. The cryptocurrency market wasn’t spared, with the broader digital asset sector losing 5.21% of its value and bitcoin ( BTC) specifically shedding 6.7% against the dollar.

Polymarket’s prediction market now shows heightened probability of a recession, with $1.1 million wagered on the outcome. The likelihood stood at a modest 39% on March 31, then leaped to 49% following Wednesday’s presidential announcement. While experiencing marginal fluctuations earlier today, the probability remained firmly at 49% as of 4:30 p.m. ET Thursday.

The contract’s comment section has become a battleground of political jabs, with critics targeting Trump supporters over economic anxieties. “Remember a few months ago when Kamala Yessers were getting laughed at in here for saying Trump WILL crash the economy? Who’s laughing now, regards?” quipped one particularly sardonic participant, capturing the tense mood. The U.S. equity market hemorrhaged a staggering $2.85 trillion in value today, with the S&P 500 bearing the brunt of this financial maelstrom.