A recent surge of new accounts on the prediction market platform Polymarket has sparked intrigue following a wave of well-timed bets related to a potential ceasefire between the United States and Iran. The highly specific wagers were placed on Tuesday, shortly before a ceasefire announcement was made, leading to substantial profits for those involved.
Notably, these bets were made during a period of heightened tensions, with former President Donald Trump having issued a dire warning via social media earlier in the day. He stated that “a whole civilization will die tonight” if Iran did not comply with demands concerning the Strait of Hormuz by his 8 PM deadline. Despite the ominous climate, at least 50 accounts placed significant “yes” bets on the possibility of a ceasefire, prior to Trump’s confirmation of the agreement in a post around 6:30 PM ET.
An analysis utilizing blockchain data from Polymarket, through the crypto analytics platform Dune, revealed that some newly created wallets were involved in these bets for the first time. One wallet, established around 10 AM on Tuesday, placed approximately $72,000 in bets at an average cost of 8.8 cents. Each betting event ranges from $0 to $1, reflecting the perceived probability of an event occurring. This user later cashed out for a considerable profit of $200,000. Another wallet, which had been active since April 6 and also focused on this event, recorded winnings of $125,500.
Interestingly, a wallet that was set up merely 12 minutes before Trump’s post wagered $31,908 at a price of 33.7 cents, which is anticipated to yield a profit of $48,500. The higher betting price could indicate that these users were anticipating a last-minute negotiation from Pakistan, which reportedly sought to persuade Trump to extend his deadline.
While some traders walked away with substantial returns, others have been left in limbo. Polymarket has marked the Iran-US ceasefire contract as “disputed” given ongoing tensions, including Iran’s continued restrictions on ships in the Strait of Hormuz and missile attacks in the area. This dispute could take up to 48 hours to clarify.
As is often the case with these prediction markets, the anonymity of blockchain technology prevents easy identification of who is behind each wallet. Polymarket employs proxy smart contract wallets, allowing a single user to create multiple accounts. As a result, while it’s unclear whether these were completely new users or established users opening additional accounts, Polymarket has not provided commentary on the matter.
Historical patterns on the platform suggest that newly created accounts making large, timely wagers is not an isolated incident. Similar clusters of bets were made before significant events, such as the capture of Venezuelan President Nicolás Maduro, where participants also earned substantial profits. This trend has raised eyebrows among both the public and lawmakers, leading to growing concerns about potential insider trading within prediction markets.
Bipartisan groups in Congress have taken note, with some legislators proposing changes to widen the definition of insider trading to incorporate these types of markets. Both Polymarket and its competitor, Kalshi, have expressed support for the introduction of more regulatory measures.
Todd Phillips, a professor at Georgia State University who has analyzed prediction markets, emphasized the need for regulatory oversight: “We can’t have people trading with inside information and expect other traders are going to be OK being in these markets.” As the situation develops, the necessity for regulation in the fast-evolving realm of prediction markets becomes increasingly clear.
