According to Polymarket, a popular prediction platform, Donald Trump’s chances of winning the 2024 U.S. presidential election unexpectedly took a dive on Wednesday. It followed one of the platform’s biggest pro-Trump market bets holders to shift some bets on his rival, triggering market soup speculation and online discussion.
According to the betting exchange, Theo4, the second-largest holder of “yes” shares for a Trump victory, made waves by placing some surprising trades against Trump’s chances. Theo4, which has 12 million shares backing Trump’s win, is only outgained by another account, Fredi9999, which has stabled bets on a Republican victory. Observers have noted the spread of both of these accounts, as well as three others, with rumors circulating that these whales could be controlled by the same person or group, possibly outside the U.S.
Trump’s Odds Fell as Theo4 Sold “Yes” Shares
In an unusual move Wednesday afternoon, Theo4 began selling blocks of Trump “yes” shares and buying ‘no’ shares, betting against Trump. At the same time, Theo4 wanted to bet on Kamala Harris, buying “yes” shares and betting on her chances of being President. Theo4 bought Trump shares and then temporarily switched strategies, but it was short-lived. Trump shares were purchased again, and Trump’s odds started swinging.
Users bet on Polymarket by placing shares worth $1 if the prediction is proved accurate. The market expects the event to occur, and therefore the price of a share, expressed in cents, is a probability of that event based upon occurrences in the past. A share priced at 65 cents offers a 65% chance that the outcome will be that.
As Trump’s odds fell with Theo4 selling Trump “yes” shares, from 65% to as low as 59% in a tight market, some investors grew concerned that the tipping point may have passed. However, the former president’s chances rallied, reaching as high as 64% as Theo4 started buying Donald’s shares again. By the time the day was over, Trump’s odds had shrunk to 63%.
Veteran prediction market trader Flip Pidot, who has been tracking large trades on Polymarket, took to X (formerly Twitter) to say that Theo4’s activity is probably to blame for Trump’s odds dropping briefly.
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Polymarket Faces Increased Scrutiny Over U.S. Trader Involvement
Suspicion that pro-Trump forces might be trying to push up Republican nominee odds by manipulating Polymarket has been fueled by the sudden bet pattern shift. Some who are aligned with Harris have called on media outlets and social media users to question why major Trump backers such as Fredi9999 and Theo4, who both happened to be backed by Donald for the administration, posted millions boosting his odds and sowing a sense of false momentum.
Despite this, advocacy for prediction markets argues that tampering with such platforms is a high-risk game. When the market is distorted, well-informed traders have what they need to profit from the discrepancies. In essence, any move that could add to the possibility of manipulation would give shrewd bettors a crack at fixing the odds, and the manipulation of a market would be transient.
Polymarket itself has come under regulatory scrutiny in recent months. The platform blocks U.S. traders from using it, but some Americans have found ways to work around that arrangement by using virtual private networks (VPNs). Polymarket is now tightening security steps to prevent American users from free access to the platform, according to Bloomberg, which added it is not clear what specific steps were taken.
New rules proposed by the CFTC are meant to clamp down on election betting altogether. It’s also got in hot water with prediction market Kalshi, which it’s trying to enforce these restrictions on, in a lawsuit. While these efforts are ongoing, political betting has become one of 2023’s biggest trends, and Polymarket’s U.S. presidential betting market alone has generated a whopping $2.3 billion in volume.
Conclusion
Major players in political betting, Theo4, and Fredi9999, have their fingers on the market trend throttle at all times. And while speculation around manipulation has grown, and regulatory pressure piles up, Polymarket has become the focal point of the 2024 election. The platform, with billions at stake, reflects the intensity of the race ahead.
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