New Polymarket Accounts Score Big on US-Iran Ceasefire Bets Before Trump's Announcement
A cluster of newly created accounts on the prediction market Polymarket executed highly specific and well-timed wagers regarding a potential ceasefire between the United States and Iran on April 7, resulting in substantial profits totalling hundreds of thousands of dollars for these users. These bets were placed in the hours leading up to President Donald Trump's announcement, despite escalating rhetoric and few public indicators that a deal was imminent.
Strategic Betting Patterns and Profits
An analysis of publicly accessible blockchain data from Polymarket, conducted via the crypto analytics platform Dune, reveals that at least 50 accounts or wallets made significant "Yes" bets on Tuesday before Trump declared the ceasefire in a Truth Social post around 6:30 pm ET. Notably, these were the inaugural bets for these particular wallets.
One wallet, established Tuesday at approximately 10 am ET, invested roughly $72,000 in bets at an average price of 8.8 cents. On Polymarket, buy-ins range from $0 to $1, reflecting a 0% to 100% probability assessment by users. This user subsequently cashed out with a profit of $200,000. Another wallet, which joined the platform on April 6 and traded on this exact event, secured a win of $125,500.
A further wallet, created merely 12 minutes prior to Trump's post, placed $31,908 in "Yes" bets at 33.7 cents, estimated to have yielded a profit of $48,500. The elevated price for "Yes" at that juncture may have mirrored late Tuesday efforts by the Pakistani government to persuade Trump to extend his deadline by two weeks.
Context and Speculation Behind the Bets
These bets occurred against a backdrop of heightened tensions, with Trump issuing a social media warning earlier in the day that "a whole civilization will die tonight" if Iran failed to meet his demand to open the Strait of Hormuz by an 8 pm ET deadline. Some analysts speculate that users may have anticipated Trump backing down, given his tendency during his second term to make bold threats only to retreat—a pattern critics have dubbed "Trump Always Chickens Out," or TACO.
While certain users reaped handsome profits, others await payouts as Polymarket has labelled the April 7 Iran-U.S. ceasefire contract as "disputed." This designation stems from ongoing Iranian restrictions on ships in the Strait of Hormuz and continued missile attacks in the region, with the dispute potentially taking 48 hours to resolve.
Anonymity and Platform Practices
Public blockchain data does not disclose the identities of those controlling the new wallets. Polymarket employs proxy smart contract wallets, enabling a single user to generate multiple accounts. Only Polymarket possesses the internal data required to ascertain whether these were genuinely new users or existing users opening additional accounts. The platform did not respond to requests for comment on this matter.
Historical Precedents and Regulatory Concerns
The trading pattern of newly created Polymarket accounts placing strategic, well-timed bets echoes earlier episodes on the platform. For instance, newly created accounts placed large wagers hours before the January capture of Venezuelan President Nicolás Maduro, profiting hundreds of thousands of dollars. Similar clusters of accounts have repeatedly capitalised on well-timed bets concerning military actions involving Iran.
Such activities have repeatedly prompted questions from the public and members of Congress regarding whether some traders are leveraging inside information to profit in these prediction markets. Bipartisan groups of senators and representatives have introduced legislation aimed at broadening the definition of insider trading to encompass prediction markets.
Even leading platforms in the industry, such as Kalshi and Polymarket, have acknowledged the necessity to expand the definition of insider trading on their platforms. Todd Philips, a professor at Georgia State University who has written extensively on prediction markets and regulations, emphasised, "This is why these markets need regulation. We can't have people trading with inside information and expect other traders are going to be OK being in these markets."
This report includes contributions from Ken Sweet and Christopher L. Keller, with Keller reporting from Albuquerque, N.M.
