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- A trader known as 0xa2 on Polymarket, who topped the platform's daily leaderboard with a profit of $917,000 after the Democratic Party won control of both the House of Representatives and the Senate in the U.S. mid-term elections.
- Most of these gains have not yet been realized, and the bet is still on an active market: the Republicans will not win any swing states, while Alaska is still awaiting the final results.
- Polymarket believes that the probability of an unexpected comeback in Alaska is 14%. Two weeks ago, traders on that platform gave Lula a 20% chance of winning, and he ultimately succeeded.
A "blue wave" swept through the U.S. midterms, with Democrats taking control of both the House of Representatives and the Senate, dealing a heavy blow to U.S. President Donald Trump.
According to the website's daily rankings, Polymarket predictor 0xA2 is the most profitable trader on the platform in the past 24 hours. Currently, their profit is $917,000, although the majority of this profit still comes from one active position, and there is still a (though small) possibility of turning that position around in reality.
This user placed a bet of $609,644 on the market proposition that “the Republican Party would not win any swing states in the Senate,” with a payout ratio of only 36% at the time; subsequently, the odds for this market soared to 87%. As a result, the value of his position increased to $1.48 million, resulting in a book profit of $860,000.
It's important to remember that these are not yet realized profits, and as we wait for the final outcome regarding 0xA2 in Alaska, profits could fall at any time. Polymarket Traders have assigned a 14% probability of a turnaround for Alaska – although it may not seem high, this website has also experienced similar unexpected results recently, such as in the Brazilian presidential election two weeks ago.
0xA2 also made a profit of $106,115 by predicting that the Democratic Party would win a Senate seat in Texas, and this profit has already been realized. Interestingly, the user's second-largest active position is worth $1.42 million, which is a bet that the existence of aliens will not be confirmed by 2027.
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The head of research at a digital asset management company, Talos, stated in a note sent to Decrypt, "Election night revealed how rapidly the 24/7 market can change when traditional exchanges are closed. As polls began to close at 6 p.m. Eastern Time, the odds of a Democratic sweep rose from around 74% to 99%. The market trading peaked between 8 and 10 p.m., driven mainly by a few large transactions."
For user Polymarket, this day was also a big day of profit, with the platform's leaderboard showing that the top 10 users earned a total of over $170,000. In contrast, on a rather ordinary day in March this year, the first place on the daily leaderboard for Polymarket earned $154,000, while the tenth place earned $29,700, according to the data for WayBackMachine.
Predicting the Market and Elections
The mid-term elections attracted a large amount of trading from the two leading predictive markets: Polymarket and Kalshi. According to data from Precition.com, the nominal trading volume in markets related to the mid-term elections over the past two weeks exceeded 546 million US dollars.
"The 2024 general elections represent a pivotal moment for predicting market trends. This is the first time they are truly put to the test of reality, and it is also an event that drives an increase in trading volume and open interest," said a person who serves as the data head for Prediction.com under the pseudonym Dash to Decrypt. "Currently, sports-related trading volumes dominate, but politics remains a key driving factor for open interest."
During the 2024 presidential campaign, Polymarket was referred to by analysts from Bernstein as the largest election forecasting market in the world, with its flagship market having a trading volume of over $3.6 billion. Perhaps more importantly, throughout the entire campaign, most forecasters were bullish on Trump, while traditional polls consistently showed him to be neck and neck with Kamala Harris. Users of the forecasting market saw this as evidence that it was more accurate than traditional political polls.
Dash said, "More and more people are looking for accurate predictions of election results, and the prediction market is one of the places where they can find such predictions."
However, these predictions are not always accurate. Just two weeks ago, the predictor Polymarket made a mistake in predicting the Brazilian presidential election: before the voting day, users gave Lula only about a 20% chance of winning, but he ultimately defeated Jair Bolsonaro and won his fourth term in office.
The expert interviewed by Decrypt at that time stated that Brazil's ban on predictive markets has put odds in the hands of traders who lack local knowledge, making it difficult to correct them in a timely manner. At the same time, the expert reminded that a 20% probability of something happening is still a very real probability.
CoinShares Senior Researcher Luke Nolan said: "In the end, just because there is an 80% probability that something will happen does not mean that it will not happen 20% of the time."
Therefore, the 14% probability that 0xA2 could lose $860,000 in profits should still be taken seriously.
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