On a night in mid-May, those watching the Polymarket betting markets would notice that the narrative is quietly being rewritten: on May 10, the probability of the contract "Bitcoin will rise to 100,000 USD this year" was still about 49%, almost a half-and-half coin toss, but by the 24th, this number had dropped to about 37%. On the same timeline, the contract for "will rise to 90,000 USD this year" had odds of about 59%, while the contract for "will fall to 50,000 USD this year" also had about a 41% probability— the market is reluctant to be completely bearish, while clearly expecting less at high levels, squeezing paths into a narrower and more hesitant range. More dramatically, on the other side of the stage, Republican lawmakers in the U.S. are pushing a new version of the ARMA Act, attempting to have the government hold about 5% of the circulating supply, creating a national-level Bitcoin strategic reserve, while reports have emerged of multiple CFTC officials questioning prediction market platforms being placed on leave. Under the intertwined narratives of pro-legislation and increasingly wavering regulatory signals, why does Polymarket present a more pessimistic "100,000 path"? This is the first contradiction this article seeks to question.

Cooling Bet on Polymarket

As a blockchain-based prediction market platform, Polymarket has previously narrowed U.S. user access and contract range under CFTC pressure, and now, the changes in odds on Bitcoin price-related contracts clearly reflect the retreat of sentiment in this round. On May 10, the probability of the contract “will rise to 100,000 USD this year” was about 49%; two weeks later, on May 24, it had slid to about 37%; at the same time, the contract “will rise to 90,000 USD this year” had a probability of about 59%, significantly higher than the 100,000 contract, while the probability of “will fall to 50,000 USD” was about 41%. In the absence of volume and open interest data, we cannot determine whether a single large player is dominating, but we can confirm that bets on an extreme bull market have been significantly reduced during this time window.

From the perspective of path assumptions, the two price levels of 90,000 and 50,000 correspond to two main lines: on one side, a probability of 59% indicates a baseline scenario of “rising but not excessively,” while on the other side, the 41% probability leaves sufficient space for high-level pullbacks, and with the 100,000 contract compressed to 37%, it indicates that those betting on a “super bull market” are no longer willing to pay a premium for favorable legislation and sovereign reserve narratives. More importantly, these numbers in the prediction market are not traditional price targets; rather, they are packaged results of price fluctuations, policy direction, and enforcement risks, under the limited compliance constraints and participant structure present in the regulatory gray zone. This makes Polymarket's current odds resemble a risk distribution map after the overlay of regulatory expectations and market expectations, rather than simply a thermometer of bullish or bearish sentiment.

ARMA Act Bitcoin National Reserve Betting

Behind these odds that overlay regulatory risk and price expectations lies a repeatedly mentioned main line: the new version of the ARMA Act promoted by Republican lawmakers in the U.S. According to a single source report, the core idea of this proposal is to have the U.S. government establish a national Bitcoin strategic reserve, aiming to hold a position of about 5% of the global circulating supply. If this scale is achieved, the U.S. government would directly leap to become one of the largest single Bitcoin holding entities in the world. Within the Republican party, there is an attempt to elevate Bitcoin from a high-volatility asset to a financial and geopolitical tool enshrined in the national ledger, locking in America’s discourse power in the digital asset system through the form of “national strategic reserves.”

Once such a bill is truly passed, it would not only change the balance sheet of the Treasury Department or a government account but also Bitcoin's foundational position in sovereign asset allocation and capital markets: when a national-level sovereign entity is forced to formally allocate positions in its medium-to-long term asset allocation, the narrative of “digital gold” and sovereign reserve assets will be institutionalized, and Bitcoin, which was originally traded at risk asset discounts, will be repriced in terms of valuation, volatility premiums, and structural correlations with traditional assets. However, this is still at the proposal and political gaming stage: the bill has not yet passed through the legislative process in both houses and lacks any timeline for signing into effect, and even within the Republican party, there is only a certain consensus on direction and discourse. For participants betting on "whether we will see 100,000 USD this year" on Polymarket, the ARMA Act appears more like a political option written into the odds—it is capable of reshaping Bitcoin's status as a sovereign asset, yet due to the high uncertainty of the legislative path, it is difficult to fully factor it into the baseline scenario, leading to natural divergence in the market’s landing probability.

CFTC Focus on Prediction Markets and Polymarket Compliance

On the other side of this "political option" is a hand that regulators have already extended. The U.S. Commodity Futures Trading Commission has long viewed most prediction markets as derivatives or swap contract variants, requiring them either to register or to prove they can claim exemptions. In recent years, the CFTC has already taken action against unregistered prediction market platforms, requiring relevant entities to stop offering certain contracts to U.S. investors; Polymarket has also been specifically named in this wave of pressure, ultimately settling with the CFTC, adjusting some unregistered contracts, and restricting access for U.S. users. Since then, Polymarket’s business boundaries have been clearly drawn: which contracts may be available globally, and which must automatically turn off in front of U.S. IPs, and for each new listing, the platform must calculate it within compliance coordinates.

However, this line has recently begun to waver. Reports indicate that multiple CFTC officials who questioned prediction market platforms internally have been placed on leave; the veracity of this single source news remains to be confirmed, but it is sufficient to expose the route conflicts within regulatory agencies: whether to continue viewing the vast majority of prediction contracts as derivatives that require licensing, or to leave more flexible exemption space for such new markets. For Polymarket, this turmoil casts direct implications on three levels: first, whether it can obtain a clear license or exemption in the U.S. in the future, escaping the transitional state of “settlement + restricted access”; second, regarding the accessibility of U.S. users, whether there is an opportunity for gradual relaxation or if it has to rely on geographic fencing and account screening to maintain “segmented operations” for the long term; third, in terms of product design, the team must preset a more conservative regulatory baseline, ensuring that contract durations, subjects, and structures stay within boundaries that the CFTC may tolerate; until a clear policy shift is seen, any innovation exceeding the line could be paused by a law enforcement notice at any time.

The Discrepancy Between Favorable Legislation and Pessimistic Probabilities

On one side is the national-level favorable narrative thrown out by Washington: Republican lawmakers are promoting the new version of the ARMA Act, hoping to write Bitcoin into U.S. fiscal asset allocation, aiming to hold about 5% of the global circulating supply, elevating it to the heights of sovereign reserve and geopolitical competition; on the other side, on Polymarket, the contract “Bitcoin will rise to 100,000 USD this year” has dropped from about 49% on May 10 to about 37% on May 24, while the probability for “90,000 USD” is about 59% and the probability for “50,000 USD” to fall remains about 41%. Logically, if the ARMA Act is seen as a high-probability event, such legislative expectations would strengthen the “digital gold” narrative and elevate extreme bull market odds, but the answer given by the contract curve is: the market is more willing to bet on a neutral or even slightly pessimistic path of “rising but not necessarily new highs” and “possible pullbacks at any time.”

The discrepancy presents itself in two layers: first, the legislation itself is still at the proposal stage, without bipartisan consensus yet formed, requiring participants to price within the broad range of “if the bill passes, the U.S. might become one of the largest single holders” and “the bill being shelved, amended, or even failing,” making it easy to treat such long-term benefits with a discount; second, regarding the regulatory and compliance risk premium, the CFTC has long included certain prediction markets within the derivatives regulatory scope, having taken enforcement or settlement actions against Polymarket, and recently there have been reports of multiple officials questioning prediction market platforms being placed on leave, leading to a “not fully exposed” regulatory table faced by the platform and traders. In such an environment, the prediction market must not only assess price paths but also price in legal uncertainties and potential enforcement actions— the upside space brought by favorable legislation is burdened with thicker discount factors from regulatory upheavals and macro concerns, resulting in the combination of a rising narrative of national strategic reserves, while the odds for the 100,000 USD contract fall. This is essentially the market using a more conservative approach to hedge any deviations that may arise between legal directions and price expectations.

Compliance Survival Challenges for Platforms and Users

For Polymarket, the past few years of reconciling with the CFTC, tightening U.S. user access, and controlling contract topics have essentially been a technical defense of “shrinking the balance sheet to survive” in the regulatory gray area: on one hand, by imposing geographical restrictions, delisting sensitive contracts, and adjusting operational structure, attempting to temporarily avoid being classified as a typical unregistered derivatives platform, while on the other hand, continuing to test market sentiment using contracts like “100,000 USD” and “50,000 USD.” For ordinary users, this means that the probability curve for “100,000 USD” still close to 49% by May 10, 2026, before falling to about 37% is not an abstract “true future,” but rather a subjective price adjusted by U.S. legislative progress, CFTC enforcement directions, platform risk controls, and liquidity constraints: Congressional deliberations over digital asset legislation, including the ARMA Act, are still ongoing, and dissent within the CFTC regarding prediction markets, even reports of officials being placed on leave, will all invisibly depress odds and raise discounts during trading. In the future, regardless of whether the ARMA Act ultimately materializes or whether Bitcoin is written into “national reserves” or continues to stay on the margins of political discourse, the long-term game between prediction market platforms and regulatory agencies regarding licensing, contract boundaries, and investor protection will continue to reshape the pricing logic of these contracts, gradually approaching a new boundary: which price expectations are allowed to enter the public market and which are forever left in the shadows under the chain.

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