Predicting the Likelihood of “China Attacking Taiwan” and Making Money? Polymarket Predicts Probability at Only 8% This Year
Will China attack Taiwan? This is a question that many Taiwanese people are curious and concerned about. On the decentralized prediction platform Polymarket, “Will China attack Taiwan by the end of 2024?” has even become a betting market, where participants can place bets by purchasing “YES” or “NO” options, and those who accurately predict the outcome can receive rewards.
According to CoinDesk, this betting market was launched as early as January this year, and its rules state:
“If China initiates a military attack to control any part of Taiwan before 11:59 PM on December 31, 2024, the decision will be ‘YES’; otherwise, the decision will be ‘NO’.”
As of the time of writing this article on the 17th, there have been bets worth $612,000, and the probability of China attacking Taiwan by the end of 2024 is only 8%.
Polymarket offers users the ability to predict various future events, such as the results of the US presidential election, when the Federal Reserve will lower interest rates, and which project will have an upcoming airdrop. During the 2024 Taiwan presidential election period, users on the platform initiated related predictions. However, due to the fact that any “election betting” by Taiwanese citizens would violate the Election and Recall Act, the Taiwan police summoned 17 Taiwanese users at that time.
️ Related reading:
Online Prediction of Presidential Elections May Violate the Law! Police Summon 17 “Predictors”, What is Polymarket?
Foreign media: Profits from participating in predictions higher than buying Taiwanese bonds
CoinDesk compared this prediction to the yield of Taiwanese government bonds. The data shows that the interest rate of the 2-year bonds issued by the Central Bank of Taiwan is slightly higher than 1.26%. However, if China does not attack Taiwan by the end of 2024, participants in the Polymarket prediction can earn an 8% return.
CoinDesk believes that historically, those who buy government bonds are betting on the future prospects of a country. In developing countries with political instability and economic turbulence, government bond yields are usually higher. In the past, bond trading premiums in countries like El Salvador were higher than in developed countries like Canada. However, this trend is changing with the series of Bitcoin policies and measures to combat organized crime implemented by the Salvadoran president.
In contrast, the Taiwanese government operates stably, with a highly developed economy and a trade surplus. The bond market tends to believe that the Taiwanese government will regularly repay its debts, so there are not many premiums. According to Fitch Ratings, Taiwan’s sovereign credit rating remained at AA level last year, higher than Hong Kong, South Korea, China, and Japan.
Polymarket predicted a 1% chance of an attack on Taiwan last year, why has the probability increased this year?
Interestingly, Polymarket users initiated the same prediction last year, allowing everyone to bet on “Whether China will attack Taiwan by the end of 2023,” and the final result showed a probability of only 1% for an attack on Taiwan. However, the amount of funds placed as bets was relatively small, worth only about $100,000.
In contrast, this year’s prediction has been going on for four months, and the average probability falls between 8% and 12%, which is higher than last year’s prediction. It is uncertain which factors directly influenced the judgment of Polymarket users. However, overall, the platform still predicts a very low probability of China attacking Taiwan this year.
According to the Central News Agency, when Chinese Communist Party Chairman Xi Jinping met with US President Biden at the end of last year, he denied any plans to attack Taiwan in 2027 and 2035, and even showed “a trace of anger” when discussing this issue. US strategic experts believe that Xi’s statement indicates that China believes it is not the right time to intensify tensions at the moment.
However, US Indo-Pacific Command Commander John Aquilino stated in March this year that China insists on achieving its ambition to be prepared for invading Taiwan by 2027. National Security Bureau Director Chiu Ming-yan also stated that 2027 is an important political year. In addition to being a turning point for Xi Jinping’s possible fourth term, it is also the 100th anniversary of the establishment of the Chinese People’s Liberation Army. They have received intelligence from the United States and are conducting necessary analysis on the relevant information.
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