Polymarket Whale's Profits from U.S. Election Bets

Blockchain analytics firm Chainalysis estimates that a pseudonymous Polymarket whale known as "Théo," or "Fredi9999," has garnered a net profit of $78.7 million on U.S. election bets. These bets included wagers on Donald Trump winning the presidency, as well as on the swing states of Pennsylvania, Michigan, and Wisconsin and the popular vote — an outcome deemed unlikely by many.

Théo rose to prominence in the election campaign amidst allegations of manipulation, as a single entity appeared to control multiple accounts on the decentralized predictions platform, potentially influencing the odds in Trump's favor.

An October investigation by Polymarket declared that there was no evidence of market manipulation amid these significant U.S. election bets, suggesting that prediction markets simply reflect the information available at any given moment, according to analysts at Presto. The market for the U.S. presidential bets generated nearly $3.7 billion in trading volume during the campaign.

Polymarket had indicated that a whale behind four substantial accounts placing bets exceeding $45 million on Trump was a French national with a background in trading and financial services.

Recent data from Chainalysis reveals that Théo seems to control nine Polymarket accounts, based on transaction timing, funding patterns, and cash-out activities linked to specific crypto exchange deposit addresses. Chainalysis reported that these accounts earned nearly $79 million betting primarily on Trump's victory, surpassing earlier profit estimates.

Poll Analysis Method

According to a Wall Street Journal report, Théo adopted a unique strategy in analyzing voter intentions. By focusing on alternative polls that asked, "who are your neighbors voting for?" rather than direct personal polling, the trader observed that Trump was outperforming expectations. This led Théo to commission their own polling to challenge the traditional polling methods for accuracy.

Théo noted how conventional polls overlooked the "shy Trump voter effect," suggesting that many Trump supporters either hesitated to disclose their voting preference or opted out of participating in polls.

One community member remarked, "What a killer example of how betting markets can surface contrarian, high-quality signals." The election results served as a vindication for Polymarket, which faced criticism for perceived inaccuracies and biases due to market manipulation or the predominance of male, crypto-native, and non-U.S. traders on the platform. Jameson Lopp, co-founder and CSO of Casa, remarked, "Legacy media can't comprehend that their polls were wrong and Polymarket was right. Money talks. You just have to listen."

Regulatory Investigation in France

In related news, the Autorité Nationale des Jeux (ANJ), France's national gambling authority, stated that it is aware of Polymarket and is currently investigating the platform's operations and compliance with French gambling regulations, particularly in light of the increased interest during the U.S. election and Théo’s betting activities.

There is a possibility that the ANJ may impose a ban on Polymarket for users in France, as reported by The Big Whale. Online gambling in France is heavily regulated, and new gambling markets require prior authorization from the ANJ.

While U.S. users are theoretically banned from using the decentralized platform after Polymarket's settlement with the Commodity Futures Trading Commission in January 2022 concerning unregistered event-based binary options contracts, some may attempt to bypass restrictions using VPNs. Meanwhile, regulated alternatives like Kalshi became increasingly popular during the election due to the company's recent court victory against the same agency.