Midterms Blue Wave Makes $917K For One Polymarket Trader, If Alaska Doesn’t Flip…

Authored by Ryan S. Gladwin via Decrypt,

A “blue wave” swept the U.S. midterms as the Democrats took control of both the House of Representatives and the Senate, in a crushing blow to President Donald Trump.

Polymarket predictor 0xA2 is the platform’s most profitable trader over the past 24 hours, according to the site’s daily leaderboard. They are currently $917,000 in profit, although most of that is still in an active position that has a real (albeit small) chance of upset.

The user wagered $609,644 on the Republicans not winning any Senate swing states when odds sat at just 36%, a market which has since surged to 87%. This turned his stake into $1.48 million, putting him $860,000 in the green.

It’s important to remember: these are unrealized gains and could drop at any moment as 0xA2 waits for Alaska’s final verdict. Polymarket traders put a 14% chance on an upset – and while this may seem small, the site has seen similarly sized upsets recently – as in the case of Brazil’s presidential election two weeks ago.

0xA2 also profited $106,115 by predicting that the Democrats would win the Texas Senate – profits that have been realized. Oddly, the user’s second largest active position is $1.42 million on the U.S. not confirming that aliens exist before 2027.

“Election night showed how quickly round-the-clock markets move when traditional exchanges are closed. As polls began closing at 6pm ET, Kalshi’s odds of a Democratic sweep went from about 74% to 99%,” Kelly Ye, Head of Research at digital asset management firm Talos, said in a note shared with Decrypt. “Prediction-market trading peaked between 8pm and 10pm ET, led by a small number of large trades.”

It was a big day for Polymarket users profiting, with the top 10 users on the platform profiting more than $170,000, per the leaderboard. To put that into perspective, on a fairly random day in March this year, the top daily winner on Polymarket profited $154,000, according to the WayBackMachine, and the 10th biggest winner that day gained $29,700.

Prediction markets and elections

The midterms attracted major activity on leading prediction markets Polymarket and Kalshi. According to Precition.com data, midterm markets attracted more than $546 million in notional volume over the past two weeks.

“The 2024 election was the breakthrough moment for prediction markets. It was their first major real-world test and the event that really drove volume and open interest,” Dash, the pseudonymous data lead at Prediction.com, told Decrypt. “Today, sports dominate trading volume, but Politics is still the key driving factor for open interest.”

During the 2024 presidential race, Polymarket became what Bernstein analysts called the world’s largest election prediction market, with its flagship market topping $3.6 billion in volume. Maybe more importantly, predictors favored Trump for most of the campaign, while traditional polls kept him neck and neck with Kamala Harris. Prediction market users took this as a sign that prediction markets are more accurate than traditional political polling.

“Increasingly, people are looking for accurate forecasts on election results,” Dash said, “and prediction markets are one place they can be found.”

Those forecasts aren’t always accurate, though. Just two weeks ago, Polymarket predictors whiffed Brazil’s presidential election, with users giving Luiz Inácio Lula da Silva about a 20% chance of winning ahead of election day, before he ultimately beat Flávio Bolsonaro to take a fourth term.

Experts told Decrypt at the time that Brazil’s prediction market ban had left the odds in the hands of traders with little local knowledge to correct the odds. Plus, experts warned that a 20% chance of something happening is still a very real chance.

“Ultimately, something that has an 80% chance of happening does not happen 20% of the time,” Luke Nolan, senior researcher at CoinShares, said.

So that 14% chance that 0xA2 loses his $860,000 in profit should be taken seriously.