Americans are tired of COVID, but traders on the Kalshi and Polymarket prediction markets believe the United States is headed for another wave by August.
In both markets, a “Yes” price for the seven-day moving average of new COVID-19 cases for the United States is above 200,000 for a single day by August 1, 2022, is at 63 cents a share, indicating traders believe there is a 63% chance of this happening. Both markets are using the CDC COVID Data Tracker for resolution.
| Market | Yes price | No price |
| Kalshi | 0.63 | 0.38 |
| Polymarket | 0.63 | 0.37 |
Of the 842 days in the CDC Data Tracker, only 83 days had a seven-day moving average above 200,000 new COVID-19 cases:
- December 7, 2020, through December 24, 2020
- January 2, 2021, through January 18, 2021
- December 24, 2021, through February 9, 2022
It’s not surprising that the COVID cases peaked in the winter and waned in the summer. What is surprising is that traders believe the seven-day moving average is going above 200,000 new cases again this summer.
Two years into the pandemic COVID tests are (relatively) abundant. It’s possible that traders are counting on a combination of lax protocols and better testing to inflate case numbers above the past two summers.
COVID forecasts are generally predicting a “peaceful summer” and do not call for a major surge in cases until winter.
Prediction market traders buy and sell binary option contracts: an event either happens or does not happen (Yes or No). A correct prediction receives $1/share, and a wrong prediction receives $0/share. The market prices can indicate what traders believe is the probability of the event happening.
Kalshi is a federally regulated exchange for event contracts. These contracts are considered a type of asset class, and insider trading is prohibited.
Kalshi COVID market rules:
If the seven-day moving average of new COVID-19 cases for the United States is above 200,000 for a single day between May 9, 2022, and May 31, 2022,* then the market resolves to Yes. Else, the market resolves to No. Note that this Contract may close and expire early. It will expire the sooner of the first 10:00 AM following the CDC reporting the event has occurred, the first 10:00 AM following data being released for August 01, 2022, or 10:00 AM on August 08, 2022.
https://kalshi.com/events/CASE7D-22AUG01/markets/CASE7D-22AUG01-A200
* The Kalshi market rules include this typo for date ranges.
Polymarket is a decentralized prediction market built on the Polygon blockchain. Traders buy and sell using a stable coin pinned to the U.S. dollar. Trading is not available to people in the United States.
Polymarket COVID market rules:
This market will resolve to “Yes” if the 7-day COVID-19 Case average is above 200,000 in the US for any day ranging from May 5, 2022, to August 1, 2022, inclusive, and “No” otherwise. The resolution source for this market is the CDC: https://covid.cdc.gov/covid-data-tracker/#trends_dailycases.
To account for potential data revisions and/or incompleteness: the market will be checked daily at 8 PM ET to see if any day within the aforementioned range has a 7-day COVID-19 case average above 200,000. These daily checks will occur from May 5, 2022, to August 8, 2022 (inclusive). If an average above 200,000 is detected, it will be checked again 7 days later. If it is still above 200,000 at that point, the market will be resolved. If it is 200,000 or below, then the market will not resolve based on that data point.
https://polymarket.com/market/will-the-7-day-covid-19-case-average-in-the-usa-be-above-200000-again-by-august-1-2022