Trump Election Bet Backfires: Trader Risks $3M Loss as Harris Gains Ground
Polymarket “Whale” Faces Significant Losses on Trump Election Bet
A prominent bettor on the cryptocurrency prediction market Polymarket has encountered substantial unrealized losses after wagering on a Trump victory in the upcoming U.S. presidential election. The trader, who initially saw over $10 million in gains, has experienced a reversal of fortune following a recent shift in odds.
The bettor, controlling a significant portion of contracts tied to Trump’s potential win, has wagered approximately $30 million on the outcome. Recent developments have dramatically impacted the trader’s position, with odds swinging towards Kamala Harris over the weekend.
By Monday morning, the unrealized losses across four accounts had reached an estimated $3 million. A surprising poll from Iowa, showing Harris leading in a traditionally Republican-leaning state, contributed to the market volatility.
The Wall Street Journal has identified the bettor as a French trader known as Théo. Communicating via Zoom and email, Théo asserted that his motivation is purely financial, without any political agenda. The stakes are high for the trader, with potential outcomes ranging from an $80 million gain if Trump wins to a complete loss of $30 million if Harris emerges victorious.
Théo faces significant market challenges due to the size of his bets and low market liquidity. He controls 25% of contracts for Trump to win the Electoral College and over 40% for the popular vote. Attempting to liquidate these positions before the election could result in substantial losses due to selling pressure.
The potential losses are staggering. Selling 47 million shares for Trump to win could lead to a 96% loss, with an average sale price of $0.02. Similarly, offloading nearly 20 million shares for Trump to win the popular vote could result in a near-total loss.
Despite these risks, Théo remains optimistic, estimating an 80%-90% chance of a Trump victory. However, he acknowledges the possibility of unexpected outcomes in this high-stakes political prediction market.
As the election approaches, market observers will be closely watching the developments surrounding this bold bet and its potential impact on the broader prediction market landscape.
