Prediction Markets Say Government Shutdown Will Be Record-Setting: Asia Morning Briefing

Why It Matters

Financial markets are already reacting: Bitcoin trades above $108,000 amid reduced risk appetite and ETF flow cooling, while gold plunged after a record rally, underscoring heightened volatility and policy uncertainty for investors and derivatives markets.

Summary

Prediction markets are pricing in a historic U.S. government shutdown lasting more than 40 days—Polymarket bettors see a likely resolution around Nov. 15 while Kalshi’s market implies an average duration of 41.6 days, topping the 2019 record. The shutdown will furlough or leave unpaid nearly a million federal employees but won’t halt the Federal Reserve, which faces the prospect of making rate decisions (markets price a 96% chance of a 25‑bp cut on Oct. 29 and 85% for another cut in December) with delayed economic data. Financial markets are already reacting: Bitcoin trades above $108,000 amid reduced risk appetite and ETF flow cooling, while gold plunged after a record rally, underscoring heightened volatility and policy uncertainty for investors and derivatives markets.