Mystery $45m wave of Trump bets moves crypto market

Four Polymarket accounts have systematically placed frequent wagers on a Trump election victory.

The chances of a victory by Donald Trump have surged on Polymarket, a crypto-based prediction market. Picture: Getty Images

Kamala Harris and Donald Trump are neck and neck in the polls but in one popular betting market, the odds have skewed heavily in the former US president’s favour, raising questions about a recent flurry of wagers and who is behind them.

Over the past two weeks, the chances of a Trump victory in the November election have surged on Polymarket, a crypto-based prediction market. Its bettors were on Thursday giving him a 62 per cent chance of winning, while the Vice-President’s chances were at 38 per cent. The candidates were in a dead-heat at the start of October.

Mr Trump’s gains on Polymarket have cheered his supporters, and they have been followed by the odds shifting in his favour in other betting markets. Elon Musk flagged Trump’s growing lead on Polymarket to his 200 million X followers on October 6, praising the concept of betting markets. “More accurate than polls, as actual money is on the line,” he posted.

The surge might be a mirage manufactured by a group of four Polymarket accounts that have collectively pumped about $US30m ($44.7m) of crypto into bets that Mr Trump will win.

“There’s strong reason to believe they are the same entity,” said Miguel Morel, chief executive of Arkham Intelligence, a blockchain analysis firm that examined the accounts.

The big bets on Mr Trump aren’t necessarily nefarious. Some observers have suggested they were simply placed by a large bettor convinced the Republican nominee will win and looking for a big payday. Others see the bets as an influence campaign designed to fuel social-media buzz for the former president.

Polymarket is investigating the activity in its presidential-election markets with the assistance of outside experts, a source said.

Although prediction markets have a mixed record of forecasting election results, Polymarket has scored some recent successes, such as its users’ early bets that President Joe Biden would drop out of the race.

Polymarket users place bets using stablecoins, a type of cryptocurrency for which each coin is worth $US1. For each contract purchased – an answer to a yes or no question such as “Will Trump win the 2024 presidential election?” – users get $1 if their bet turns out to be correct, nothing if they were wrong.

They can also sell contracts without waiting for the question to be resolved, allowing them to exit a bet for a profit or a loss.

The accounts betting big on Mr Trump – Fredi9999, Theo4, ­PrincessCaro and Michie – were all funded by deposits from Kraken, a US-based crypto exchange, according to Arkham. They behave in a similar fashion, systematically placing frequent bets on Mr Trump and stepping up the size of their bets at the same time. The oldest of the accounts was created in June, the newest this month.

The accounts have ploughed most of their money into straightforward bets on Mr Trump’s winning the presidency but they have also put millions of dollars into bets that he will win swing states such as Pennsylvania, as well as long-shot bets on his winning the popular vote – smaller side markets are also available.

Even many die-hard Trump fans consider it unlikely he will win the majority of votes cast. Mr Trump lost the popular vote in 2016 and 2020, winning the presidency in 2016 by capturing enough swing states to triumph in the Electoral College.

Adam Cochran, a veteran crypto investor, said the betting spree appeared to be an attempt to generate a sense of momentum for Mr Trump going into election day. If he loses, his favourable odds in the betting markets could bolster arguments that the election was stolen from him, said Mr Cochran, who described himself as a right-of-centre voter backing Ms Harris.

While $US30m might seem costly, it is sufficient to swing the odds on Polymarket and not a large outlay for a deep-pocketed individual seeking to influence the election, he added.

The Wall Street Journal