Vitalik Buterin, the co-founder of Ethereum, has revealed his investment strategy on the prediction marketplace Polymarket during a recent interview. He explained that he tends to bet against the prevailing extreme market sentiments, especially in what he describes as “crazy mode.”
Buterin illustrated his approach by citing examples such as bets on whether Donald Trump would win the Nobel Peace Prize, or predictions claiming that the dollar would plummet to zero amidst widespread panic. His strategy proved profitable, as he reported making $70,000 in 2025 from a total stake of $440,000, translating to a gain of approximately 16%. He noted that betting against extreme market sentiment has historically led to financial success, advising others to focus on markets where irrational predictions prevail.
In a broader context, Loxley Fernandes, CEO of the prediction market Myriad, commented on Buterin’s success. He described it as a commendable endorsement of prediction markets, stating that when emotional extremes enter the market, rational investors can stabilize prices by aligning them closer to reality.
However, Buterin did not shy away from discussing the challenges plaguing prediction markets such as Polymarket, particularly concerning the reliability of “oracles.” These oracles are essential third-party services that relay real-world data to the blockchain, but Buterin raised concerns about their security.
He provided a troubling example involving a prediction market associated with the Russia-Ukraine conflict. The market was centered around whether Russian forces would control the city of Myrnohrad, with its data sourced from the Institute for the Study of War. The legitimacy of the market was compromised when the institute’s account on X was hacked, altering maps to inaccurately show Russian control of strategic locations, which led to substantial payouts for some bettors. Reports indicated that trading volume hit approximately $1.3 million, with certain payouts exceeding 33,000%.
Buterin emphasized the need for improved security measures for prediction market oracles, noting that the incident highlighted vulnerabilities in their current systems. He proposed two potential solutions: the first would involve relying on established news organizations, like Bloomberg, to provide data. The second option would employ token-based voting mechanisms similar to those utilized by UMA, which could enhance decentralized reliability.
A robust oracle system is vital, according to Buterin, as almost all decentralized finance (DeFi) projects depend on accurate data inputs. He stressed the importance of securing oracles, especially as the blockchain space aims to create real-world applications, whether in real estate or electoral predictions.
