Prediction markets put the probability at 46%: Strait of Hormuz traffic returns to normal by December 31. Currently, markets are divided (46% YES, 54% NO). Odds of when traffic will return to normal have tumbled sharply over the last few days.
The probability that Strait of Hormuz traffic returns to normal by December 31 has fallen to 46% YES on Kalshi, down from a peak of over 50% for an October 1 reopening as recently as July 4. The market's resolution is tied to a specific shipping metric tracking vessel transits through the waterway, which has remained disrupted since Iran's blockade began in late February following the death of Supreme Leader Ayatollah Ali Khamenei. Traders have wagered nearly $14 million on the broader deadline ladder, with the December 31 contract now the most actively traded rung, reflecting deep uncertainty about the timeline for restoring normal flows. [CNBC, Jul 08]
The stakes are enormous because the strait handles roughly 20% of global oil consumption, and Brent crude jumped 3.15% to $109 on the day the blockade was announced. Treasury Secretary Scott Bessent said in May that China would help reopen the waterway behind the scenes, but Polymarket traders assigned only a 59% chance of normal traffic by December 31, while Kalshi's equivalent contract sat at 46% — a notable gap between the two platforms despite identical resolution criteria. The divergence reflects differing views on whether diplomatic back-channels can overcome the security vacuum left by the assassination of Iran's leadership, with the U.S. and Israel having no formal channel to Tehran. [Benzinga, May 15]
Negotiations over reopening the strait remain stalled as of mid-August, with Kalshi pricing a 38% chance of normal traffic by year-end on August 10, down from 45% a week earlier. The market's term structure shows a steep climb in probabilities as the deadline extends: under 6% for May 31, 46% for July 31, and 79% for December 31 as of May 15 — but those later-dated odds have since compressed as the conflict drags on. The next major catalyst is a scheduled September 29 contract expiration on Kalshi covering a broader reopening window, which will force traders to reassess whether the current diplomatic stalemate can break before winter. [Seeking Alpha, Aug 10]
Active market on Polymarket with $7.6M in total volume. Sufficient liquidity for most position sizes. Currently priced at 46c YES.
4/5 models agree on NO, fair value 40c vs market 58c. BUY NO at 58c — models see 18c of upside.
| Model | Says | Fair Value estimated fair price | Confidence |
|---|---|---|---|
| MATH PIN Model | NO | 61c | — |
| MATH Compound Signal | YES | 51c | — |
| AI Claude Analysis | NO | 60c | 56% |
| AI DeepSeek Quant | NO | 61c | 72% |
| AI Kimi Macro | NO | 58c | 55% |
4 of 5 models estimate NO fair value above market (58–61c vs 42c). DeepSeek Quant leads with 72% confidence.
Models estimate fair value of NO at 60c — market prices it at 42c. 18-point gap supports NO.
Smart money is positioned decisively against normalization: NO entries at 17c-43c reflect early, low-cost conviction that Hormuz traffic will not fully return to normal by year-end, and those wallets are now sitting on gains. The YES cohort chased in at 65c-74c and is trapped, signaling that tracked capital sees downside — the dominant NO side implies smart money expects continued disruption or unresolved risk into December 31.
| Wallet | Category | Side | Amount | P&L | |
|---|---|---|---|---|---|
| 0xb8e6..67 | Smart | NO | $2.2K | +196% | |
| 0x0c0e..4e | MM | NO | $21.5K | +20% | |
| 0x0845..6f | MM | NO | $20.0K | +25% | |
| 0xcaab..dd | MM | YES | $8.7K | -45% | |
| 0x12d6..a8 | MM | NO | $6.5K | +106% | |
| 0xd48a..90 | MM | YES | $1.4K | -28% |
Every tracked YES position (entered 65c-74c) sits underwater against the 58c mark, while 75% of NO holders (entered 17c-43c) are in profit. The realized edge belongs entirely to the NO side, and with no profitable YES capital defending the current price, support at 58c looks fragile and biased to drift lower.
Polymarket prices YES at 46c while Kalshi has it at 54c — a 8-cent gap. Kalshi traders are more bullish on YES. Our model estimates fair value at 40c.
| Platform | YES Price | Volume |
|---|---|---|
| Polymarket | 46c | $7.6M |
| Kalshi | 54c | — |
| Our Model | 40c | — |