The global internet, a seemingly ethereal cloud of data, is anchored to the reality of thousands of miles of fiber-optic cables resting on the ocean floor. According to prediction market participants, that physical foundation is looking increasingly precarious. As of mid-January 2026, traders on platforms like Manifold Markets are pricing in a staggering 43% to 89% chance of a major internet outage caused by undersea cable failure before the end of the year.

This surge in "Yes" bets follows a series of high-profile "gray-zone" incidents in the Baltic and Red Seas that have left infrastructure experts and geopolitical analysts on edge. With traditional diplomatic channels strained, the vulnerability of the global data backbone has become a focal point for speculators who believe the next major theater of conflict won't be fought on land, but in the depths of the ocean.

The Market: What's Being Predicted

The primary theater for this speculation is Manifold Markets, where the question "Major internet outage due to undersea cables breaking by end of 2026?" has seen significant volume and volatility. While the odds have fluctuated wildly based on daily news cycles, the consensus has trended upward since a recent incident near Liepāja, Latvia, on January 14, 2026. Resolution criteria for these markets are typically stringent: a "YES" resolution requires an outage that affects at least one entire nation or results in a documented 50% or greater reduction in regional bandwidth specifically attributed to physical cable damage.

On Polymarket, the focus has been more granular, targeting specific geopolitical actors. For instance, a market regarding whether Iranian activity will be blamed for recent U.S. service disruptions is currently trading at 18%, reflecting a more skeptical view of domestic impacts versus international ones. Meanwhile, regulated exchanges like Kalshi (whose parent company is KalshiEX LLC) have seen increased interest in broader infrastructure and power grid markets, which often serve as a proxy for traders hedging against a general breakdown in societal connectivity.

Why Traders Are Betting

The bullishness on a "Global Disconnect" scenario is driven by a sobering reality: undersea cables are remarkably easy to break and notoriously difficult to fix. Traders are pointing to the "economic asymmetry" of cable sabotage. As evidenced by the February 2024 sinking of the Rubymar and the subsequent damage to the AAE-1 and Seacom lines, a single ship's anchor can cause hundreds of millions of dollars in damage and disrupt 25% of traffic between Asia and Europe.

Geopolitical tensions are the primary catalyst. In late 2024 and throughout 2025, suspicious vessel activity—including a Chinese-linked ship and a Finnish-investigated vessel—coincided with severed links in the Baltic Sea. Traders are betting that these are not accidents but "stress tests" by adversarial powers. Furthermore, the global fleet of cable-repair ships is currently at a breaking point; with a record backlog of repairs as of early 2026, even a minor increase in cable "faults" could lead to the kind of prolonged, major outage that would trigger a market payout.

Corporate giants like Alphabet Inc. (NASDAQ: GOOGL) and Meta Platforms, Inc. (NASDAQ: META) have invested billions in private subsea infrastructure to ensure redundancy, but even their massive networks are not immune to simultaneous cuts in chokepoints like the Luzon Strait or the Suez Canal. Traders on Manifold have noted that if a conflict were to erupt in the Taiwan Strait, the resulting cable damage would likely cause a total regional blackout, making a "YES" resolution almost certain.

Broader Context and Implications

This market reflects a broader shift in prediction markets away from election forecasting and toward "tail-risk" infrastructure events. The high probability assigned to a cable failure suggests that the public—or at least the segment of the public that trades on these platforms—has lost confidence in the "invincibility" of the modern web. It highlights a transition where the internet is no longer viewed as a resilient, decentralized mesh, but as a fragile series of pipes owned by a handful of tech titans and vulnerable to any bad actor with a heavy enough anchor.

The real-world implications of such an event would be catastrophic. Beyond the inability to scroll social media, a major cable failure would paralylyze global finance, disrupt supply chains managed by companies like Amazon.com, Inc. (NASDAQ: AMZN), and potentially take down cloud services provided by Microsoft Corporation (NASDAQ: MSFT). Prediction markets are currently serving as an early warning system, pricing in risks that traditional insurance and government agencies may be slower to acknowledge publicly.

What to Watch Next

The next several months are critical for this market. Traders are closely monitoring the deployment of new cable-laying vessels and the progress of the "Far North Fiber" project, which aims to bypass traditional chokepoints by laying cable through the Arctic. Any delay in these projects will likely drive the "YES" odds higher on Manifold Markets.

Key dates to watch include the upcoming NATO summit in June 2026, where "undersea infrastructure resilience" is expected to be a top agenda item. Additionally, any unusual movement of "research vessels" in the North Sea or the South China Sea will likely cause immediate spikes in betting volume. If the current trend of "accidental" anchor draggings continues into the spring, we could see the probability of a major 2026 outage cross the 90% threshold.

Bottom Line

The prediction markets are sending a clear, if alarming, signal: the "physical internet" is under siege. With odds sitting well above 50% for a major disruption by the end of 2026, traders are no longer asking if a major cable failure will happen, but where and when. The convergence of aging infrastructure, a shortage of repair capacity, and aggressive "gray-zone" tactics by nation-states has created a perfect storm for a global connectivity crisis.

Whether these markets prove to be accurate or merely a reflection of modern geopolitical anxiety remains to be seen. However, for those looking to understand the fragility of our digital age, the activity on Manifold and Polymarket offers a much more immediate and visceral data point than any white paper. In the high-stakes game of global infrastructure, the "smart money" is currently betting that the lights—or at least the routers—might soon go out.

This article is for informational purposes only and does not constitute financial or betting advice. Prediction market participation may be subject to legal restrictions in your jurisdiction.

PredictStreet focuses on covering the latest developments in prediction markets.
Visit the PredictStreet website at https://www.predictstreet.ai/.