This is a linkpost for https://jorgevelez.substack.com/p/the-mysterious-trump-buyers-on-polymarket
The Mysterious Trump Buyers on Polymarket
9Mitchell_Porter
7Ali
3NicholasKees
7Hastings
9Annapurna
1Morpheus
3Rafael Harth
2Annapurna
1mirskat
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Isn't this just someone rich, spending money to make it look like the market thinks Trump will win?
3Just adding some additional context that might be useful. PredictIt is a similar election betting platform but has a cap on the maximum amount traders are able to bet (I think <$1k, so relatively low). This means that if Polymarket is a money-weighted information aggregation mechanism, PredictIt is a person-weighted information aggregation mechanism. As noted in the post, from 6th October to just now Trump has gone from 50.8 to 60.1 meaning a difference of 1.6 cents with Kamala to a 20.2 cent difference (18.6 cent swing). On predictit he's gone from 51:53 to 55:48 on the same interval (9 cent swing). Of course it's possible that people on PredictIt are changing their bets due to Polymarket prices (eg. by arbitraging), but there's some evidence that at least half the change isn't due to these large bettors (whether those large bettors are trading based on private information, for manipulation purposes, or other reasons).
What are the odds that Polymarket resolves “Trump yes” and Harris takes office in 2025? If these mystery traders expect to profit from hidden information, the hidden information could be about an anticipated failure of UMA instead of about the election itself.
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1I would say very low?
I would also rank the theory that these mystery traders have hidden information as low. As of right now, based on what I have uncovered, I would say that the mystery trader(s) could be one the following (rank in order of what I think more likely to least likely):
1. A wealthy francophone european, somewhat involved in crypto and/or tech, who believes Trump will win and is betting a somewhat trivial amount (to this person) on this outcome. It is key to note that the main account has been trading since June, yet it only started seriously trading these markets after Musk appeared with Trump on stage.
2. A somewhat sophisticated entity that has a proprietary model that has Trump winning as a higher outcome, and believes the odds are mispriced. This entity realized that Polymarket had sufficient liquidity to allow it to bet 8 figures and move the price roughly to what it thinks Trump's real odds are. This entity is likely foreign, and thus it has not been able to trade on Kalshi.
3. An insider of the Trump campaign that is using internal information to make a more informed trade. Perhaps this is someone related to Elon. It could also be someone who understands that since May last year people have been using Polymarket as yet another gauge of how this election might turn up, and by pushing the odds on Poly they are distorting the narrative 18 days before the election.
Can someone who is already trading on Polymarket or is planning to do so soon tell me if there are any hidden fees (or ways my money might be locked up for longer than I expect) if I trade on Polymarket? Four years ago I got hit by enormous ether gas fees on Augur, which still made my bet positive EV, but only barely so (I had to wait quite a while for the gas cost to go that low and was loosing out on investing the money and my attention). I plan to bet ~$3K-$7K and think Kamala Harris has a 45% chance of winning. Is that enough for all the transaction costs to vanish?
You should be good (though I have only bet once; haven't withdrawn yet, so can't guarantee it). I think the gist of it is that Polymarket uses layer 2 and so is cheaper.
There are no transaction costs if you have USDC on Polygon. Onboarding USDC into Polygon might bear costs but they are minimal.
Interesting article. Two questions about prediction markets
- What do you think about betting on Kamala winning the popular vote? It seems like a better bet for expected values. I am unsure if Republicans' distrust of election results increases the betting risk (what if elections are contested?).
- Do you think prediction markets are better than they used to be around 2020?
How four accounts have shifted the election probabilities narrative
As the US Presidential Election approaches, all eyes are on who will become the next president - Vice President Kamala Harris or former President Donald Trump. In early October, many analysts believed both candidates had a relatively equal chance of winning. However, a significant shift in betting markets occurred following Trump’s rally in Butler, PA on October 6, with odds heavily moving in his favor.
On Polymarket, traders began noticing a sharp increase in bets on Trump. This shift was driven by a group of relatively new accounts, which have, as of today, deposited approximately $35 million USDC into Polymarket and deployed $33 million across election-related markets, always betting on Trump / Republican outcomes. This has sparked a lot of online speculation, leading to misconceptions. Below, I aim to clarify these points.
1. Can a Group of Accounts Really Shift the Market This Much?
While Polymarket’s US Presidential Election market might be the most liquid in terms of political betting today, it isn’t as deep as it appears. For example, the bid-ask spread sits at 58,657 x 60.6 - 60.7 x 35,429. This represents a relatively tight market, but one without significant liquidity. If someone were to place a market order for 1 million Trump shares right now, the odds would move from 60.7 to 62. Since October 6, these accounts have collectively bought over 40 million Trump shares, leading to the observed shift in Trump’s odds from 50.8 to 60.7.
2. Is Trump Simply Gaining Momentum, and Did These Accounts Predict That?
Possibly. Many market participants are investigating whether these accounts are related, and if so, who might be behind them. Understanding who might be behind these accounts can provide clues as to whether they have superior knowledge and resources when it comes to the election. Some users on X have criticized attempts to identify the individuals, arguing that it is unethical or illegal. However, understanding who your counterparty is can provide a competitive advantage, a tactic frequently employed in capital markets. For example, when a large block of shares enters the market, traders often ask, "Who is selling?" to inform their strategies.
3. Why Aren’t Sharp Traders Betting the Other Side to Normalize the Odds?
Some market participants have been facilitating trades for these accounts, allowing them to accumulate 40 million shares of Trump over the past 12 days. Additionally, certain traders have exploited arbitrage opportunities between Polymarket and other betting platforms, which has pushed the price of Trump up across multiple sites.
However, sharp Polymarket traders have largely stayed on the sidelines recently. Why? Thanks to Polymarket being on the blockchain, we can track when these accounts place orders, how much cash they have left, and when they deposit additional funds. This transparency is crucial. Given that these accounts have recently deposited another $5.5 million USDC into Polymarket, there is reason to believe they may continue pushing Trump’s odds higher. As a result, many experienced traders are adopting a “wait and see” approach, ready to act when the time is right. This level of patience and strategic insight is key for any great trader.
With 18 days until the election, it will be fascinating to observe how these market dynamics continue to unfold. I’ll be closely monitoring the situation and how it affects both the odds and the broader election forecasting conversation.
Special thanks to Arkham Intelligence, Fozzy, Domah, and others for their assistance in compiling this information.
Disclaimer: I trade on Polymarket as a hobby.