As the financial world eagerly awaits the Federal Reserve’s upcoming decision on interest rates, one trader on the decentralized betting platform Polymarket has taken a bold stand. Known by the pseudonym JustWakingUp, this trader is backing a significant 50 basis point (bps) rate cut, contrasting sharply with the prevailing market consensus of a smaller reduction.
Betting Big on Bold Moves
JustWakingUp isn’t just any trader; they’re Polymarket’s most prolific participant. With nearly $400 million in total trading volume and profits exceeding $2 million, their track record speaks volumes. This week, they’ve placed a $15,000 bet that the Fed will slash rates by 50 bps, bringing them to 3.75%. As of now, the wager is showing a 3% gain, offering a glimpse of potential success. If the Fed comes through with the expected cut, JustWakingUp stands to earn a staggering $226,000.
A Market Divided
Despite JustWakingUp’s confidence, the broader market remains skeptical. According to the CME’s FedWatch Tool, there’s a 91% probability that the Federal Reserve will opt for a more conservative 25 bps cut. However, the landscape is shifting. The odds of a more aggressive 50 bps reduction have surged to nearly 10%, catalyzed by disappointing economic indicators.
Last Friday’s underwhelming August jobs report has fueled speculation about a larger rate cut. Moreover, influential voices in the finance world, including BlackRock and Standard Chartered, have thrown their weight behind the call for a 50 bps reduction.
Economic Indicators Stir the Pot
The U.S. Bureau of Labor Statistics added fuel to the fire with its recent revelation of a significant downward revision in job growth data. The economy added 911,000 fewer jobs than initially estimated over the 12 months ending March 2025, marking the largest annual revision on record. This alarming statistic has heightened expectations for a more substantial rate cut.
Traders are now turning their attention to upcoming economic data releases. The U.S. Producer Price Index and Consumer Price Index numbers are expected on Wednesday and Thursday, respectively. Should these figures fall below expectations, they could bolster the case for a 50 bps cut, potentially igniting rallies in both bitcoin and stock markets.
The Bullish Case for Bitcoin and Stocks
If the Federal Reserve opts for a more aggressive easing, it could have significant implications for the cryptocurrency and stock markets. Historically, lower interest rates have been favorable for risk assets like bitcoin. A 50 bps cut could spur increased investor interest and drive up prices.
Stocks, too, could benefit from such a move. Lower borrowing costs can stimulate economic activity, boosting corporate earnings and, by extension, share prices. It’s a scenario that traders like JustWakingUp are banking on, and if it materializes, it could lead to a notable market upswing.
Weighing the Risks
However, it’s important to consider the risks associated with aggressive rate cuts. While they can provide short-term economic relief, they may also signal deeper economic troubles. A 50 bps cut could be interpreted as a sign that the Fed is deeply concerned about the economy’s health, potentially leading to increased market volatility.
Moreover, rapid rate cuts can limit the Federal Reserve’s flexibility in the future. If economic conditions worsen, the Fed might find itself with fewer tools to combat downturns. It’s a delicate balancing act that policymakers must navigate carefully.
Conclusion: A Gamble Against the Grain
In the world of finance, bold bets often come with high stakes. JustWakingUp’s gamble on a 50 bps rate cut is a testament to the dynamic and unpredictable nature of markets. While the odds may be stacked against them, the potential rewards are substantial.
As traders and investors await the Fed’s decision, the coming days will be pivotal. Economic data releases and shifting market sentiment will play crucial roles in shaping expectations. Whether the central bank opts for caution or decides to take a bolder path, one thing is certain: the outcome will have far-reaching implications for markets and traders alike.
As we edge closer to the Fed’s announcement, all eyes will be on JustWakingUp and their high-stakes bet, waiting to see if their gamble pays off in a big way.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
