Polymarket whales are spending millions betting on who will win the US presidential election, distorting the prediction market.
Accounts named Fredi9999, Princess Caro, Michie, and Theo4 have collectively spent nearly $24.7 million on the simple question: Who will win the 2024 presidential election?
Their “Yes” bets on former President Donald Trump have helped drive the cost to 61 cents, implying 61% odds of a win come November 5.
Such bets have had a massive effect because few buyers and sellers trade on the relatively small platform, experts say.
Vice President Kamala Harris may have a two-point lead in national polls, but the crypto-powered betting platform gives Trump a massive lead — Harris bets cost only 37 cents, implying a 37% chance of a win.
“It’s about the depth of the market,” Jake Dwyer, founder of venture fund The Factor Corp, told DL News. “If the market interest exclusively exists at a tight range, as soon as you want to buy a big amount, you find there’s no size offers.”
Polymarket’s breakout year has been powered almost exclusively by US election interest. Nearly 75% of all trading activity on the platform is related to those bets.
Its biggest election bet has hosted more than $2 billion in cumulative trades, but that doesn’t mean there are billions in volume sloshing around today.
Data from Dune Analytics indicates that Polymarket’s open interest — the amount of open trades on the market — is just over $200 million.
Users can then buy “Yes” or “No” shares for different candidates, including Michelle Obama, Vivek Ramaswamy, and the hip-hop artist Ye.
As users pour in to buy these shares, their prices also rise.
Prediction markets are tools to take financial positions on outcomes that are hard to capture with traditional instruments.
They reveal the current sentiment of market participants, and that's all.
They aren't "oracles of truth" any more than stocks, futures, or any other tool.
— Jake Chervinsky (@jchervinsky) October 16, 2024
Polymarket whales are spending the most money in this specific market.
Fredi999, for example, currently holds more than $12.3 million in “Yes” shares for Trump. PrincessCaro has $3.9 million on the same bet, Michie is betting $3.5 million, and Theo4 holds $5 million.
These aren’t their only bets on the election, either. Fredi999, for instance, has another $4.1 million on other pro-Republican bets.
In total, all four accounts have nearly $35 million in pro-Republican trades.
Given the low liquidity, it’s been enough to distort sentiment surrounding one of the biggest elections in the last four years.
“This market is not deep on a traditional scale yet, especially given the magnitude of the event,” tweeted Hasu, strategy lead at Flashbots. “It’s misleading. This is assuming there is 0 fake volume on Polymarket.”
Liam Kelly is a DeFi Correspondent at DL News. Got a tip? Email him at liam@dlnews.com.