As public sentiment shifts against military action, the likelihood of a US declaration of war on Iran is a mere 6%, reduced from 8% just a week before. This trend suggests low public support for the conflict, which may deter Congress from pursuing a formal declaration of war. Current market indicators reflect this cautious outlook. For April 30, the market remains nearly flat at 1%, with traders not anticipating any immediate escalation. However, the term structure shows a significant 6-point jump from April 30 to December 31, indicating that traders may be preparing for a potential catalyst that could arise later in the year.
When examining trading volumes, it is evident that actual USDC trading activity remains low, with just $18 per day attributed to December 31 and $719 for April 30. The depth of the order book indicates that it would take approximately $2,769 to alter December’s war odds by five percentage points. Such data reveals a market condition characterized by thick liquidity. Notably, the largest single move recorded was a 1-point decline at 4:02 AM, likely driven by fresh public opinion data.
This polling data hints at domestic pressures that could limit any further escalation. A YES share priced at 6¢ would pay $1 if Congress were to declare war before the end of the year, implying a remarkable 16.67x return on investment. However, for this to materialize, a shift towards a more aggressive foreign policy would be necessary.
Investors should remain vigilant and monitor any statements from Congress, as well as actions taken by Trump or Secretary of War Pete Hegseth. If Congress articulates strong opposition or Trump advocates for diplomatic solutions, it is likely that market expectations would result in further declines in the estimated war odds.