North Korea To Detonate A Nuke? Why Crypto Bettors Rate This As More Likely Than You May Think

Crypto bettors on Polymarket, a cryptocurrency-based prediction market, think the chances of North Korea detonating a nuke are small but not insignificant: a market for North Korea to detonate "a nuclear device in any capacity by March 31, 2024" is trading around 5%.

What Happened: The market rules specify it "includes offensive usages, nuclear tests, and accidental detonations" but not a failed detonation, a fake weapon or a dirty bomb. 

The trading volume of around $80,000 is comparatively modest, although one trader stands to gain over $50,000 if the market were to resolve to Yes.

Interest in prediction markets has picked up significantly, with Polymarket recording a record $50 million in trading volume in January 2024 with interest in politics-related bets rising.

Despite an abundance of election-related markets, U.S. users are blocked from betting due to a CFTC order.

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Why It Matters: The odds may seem high to an outsider, but a Daily Beast article discusses why a nuclear weapons test by North Korea in 2024 is not out of the question.

Kim Jong Un's war preparations, bolstered by his ambitions by support from China and Russia, heighten U.S. concerns. At the end of January, North Korea launched three cruise missiles within a week as part of continued saber-rattling toward its southern neighbor, South Korea.

The Daily Beast cites Bruce Klingner, a former CIA analyst and long-time Korea expert at the Heritage Foundation, saying the North Korean regime could "launch an ICBM over Japan and demonstrate multiple-warhead or re-entry vehicle capabilities." 

Bruce Bechtol, former Defense Department intelligence analyst, thinks "renewed and focused testing of North Korean ballistic missile systems and perhaps even a nuclear test" are on the agenda. 

North Korea has previously tested nuclear warheads six times: in 2006, 2009, 2013, twice in 2016 and in 2017.

What's Next: Prediction markets, such as the Republican vice president nominee market, continue to attract interest from bettors and analysts seeking tangible probabilities alike.

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