Trump surges ahead

Polymarket’s odds on the outcome of the US election have shifted significantly in favor of Donald Trump, reportedly thanks to a $26m wager from a single whale from France.

a significant gap has appeared, with Trump now enjoying a substantial 19.4% lead

Both Trump and Kamala Harris had remained neck and neck in Polymarket for several months. But since October 5, a significant gap has appeared, with Trump now enjoying a substantial 19.4% lead and a 59.7% implied probability of winning, with Harris on 40.3%.

The move is contrary to publicly available polling data, which continues to suggest a very tight race is likely. Recently-released polls from YouGov/The Economist and CBS suggest a popular lead for Harris, while the model of election forecaster FiveThirtyEight gives Harris a 53% chance of winning the election.

Instead, the reason for Polymarket’s shift appears to be a hefty $26m wager placed by a single entity, according to cryptocurrency analysts. Placed mostly in the last two weeks, the bets haven’t been met by equal demand for punters backing Harris, leading to a significant shift in the odds.

The French connection

When analsyts checked the source of the larger bets backing Trump on Polymarket, several names repeatedly showed up, including Fredi9999, PrincessCaro, Michie, and Theo4.

Analysts noted that the accounts had very little overlap in their betting, placed their wagers around the same time, and tended to bet based on large, round deposits from the Kraken cryptocurrency exchange, heavily implying that the accounts were all backed by a single entity.

A further investigation from political betting account @Domahhhh went on to reveal yet more information. Responding to a comment from the Michie account on the site, he asked to talk to the mystery figure on Discord.

Michie stated he believed Trump was a 75% favorite

A bizarre conversation followed, where Michie stated he believed Trump was a 75% favorite, denied any political bias, and claimed to be a French trader who formerly lived in New York, before things quickly turned sour and the conversation came to a close.

Manipulation feared

Polymarket is only available to customers outside of the US, although the restriction is fairly trivial to circumvent with a VPN. In contrast, rival prediction market Kalshi is only available to customers within the US, and recently won an appeal against the Commodity Futures Trading Commission (CFTC) to continue offering positions on the election.

Kalshi requires far less money to create a significant shift

Kalshi has also seen a divergence in favor of Trump over recent days, although the move happened later and gives Trump a 12% lead compared to Polymarket’s 19.4%. In addition, Kalshi requires far less money to create a significant shift, with less than $19m traded on the market, a figure dwarfed by the more than $2bn volume on Polymarket.

The significant divergence between betting markets and traditional polling models is likely to draw further scrutiny to the prospect of election betting in the US. One of the main arguments against allowing the wagers, which was brought up by the CFTC in the case against Kalshi, was the prospect of outsiders manipulating the market to give the impression a candidate was more favored than in reality.

It’s unlikely we’ll find out whether the mystery French trader had any ulterior motive beyond a conviction that his bets were profitable ones.