In brief
- Polymarket is a blockchain-based betting platform that takes wagers on the likelihood of events.
- One bettor has lost more than $1 million betting on a Trump win and inauguration, with many bets made after Election Day.
- Arbitrage is unlikely given the high price points of the bets.
Yesterday, an anonymous bettor on Polymarket, an Ethereum-based betting market, put down $25,000 that Joe Biden would not be inaugurated “in-person” outside the Capitol this morning.
It was a bet the person had made many times before, along with another more generic wager that Biden wouldn’t be inaugurated in any manner today. And it accompanied hundreds of thousands more in bets from November and December that Donald Trump would be inaugurated today instead.
That whale is now in a $1 million hole on Polymarket, according to data compiled by Polymarket Whales, having lost $354,229 on bets that Trump would win the election. Those losses were further compounded by $622,223 in misbegotten wagers that Trump would be inaugurated—all made after networks had projected Biden the winner.
Polymarket is a betting platform built on the Ethereum blockchain. Patrons buy shares in either a yes or no—both if they’re hedging—outcome of a particular event. When that event does or doesn’t happen, those shares go to $1 or become worthless. But, because this is a betting market, the price of those shares fluctuates depending on how other people are betting.
For example, if most people think Kamala Harris will be president in 2024, shares in her victory will become more expensive. If most think someone else will win, the price will drop. The Trump-inclined bettor bought over 3.9 million shares in a Trump inauguration at an average price of just under $0.16. That means that the market viewed Trump’s chances of becoming sworn in at about 16%. On November 19, the whale even bought shares at close to $0.20.
Had Trump actually been sworn in today, the bettor would have been in line to pocket $4.3 million in winnings, minus the initial bet.
Of course, it all could have been a hedge and this particular bettor—as well as others who have lost large amounts—could be playing a game of arbitrage. But Jeff Rossiter, who tracks large trades for Polymarket Whales, thinks it’s unlikely.
In all my years playing poker I never saw someone tilt this badly. Lost $446,600 betting on the inauguration and is still firing.https://t.co/ntfzt0zKU7 https://t.co/Ouvkww99eY
— Jeff Rossiter (@JeffRossiter) January 20, 2021
“It's plausible that some of the Trump Yes/Biden No bettors were hedging against action outside of Polymarket,” he told Decrypt. “There's a few things that make me think it's unlikely for this account: their average price is 0.159 which is about as high as it got, they bet a large amount before the election [$348,226], and they haven't taken any trades in the opposite direction despite significant price fluctuations.”
Don’t feel too bad for the whale, though. They can still get a morbid consolation prize if the country is doused with further instability. In a wager straight out of a certain 1988 Dirty Harry movie, they have over $35,000 riding on Joe Biden not being president come March 1, 2021.