No, Polymarket Whales Are Not Evidence of Prediction Market Manipulation

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By Maya Cantina

This is a long-winded way of saying that the market is never “wrong.” It simply reflects all available information. If you disagree with the market, you can be rewarded for that belief by betting yourself. US users have alternatives to Polymarket, which is prohibited from serving them under a regulatory rule. If you think the Polymarket whale a) significantly drove up the price of the Trump contract and b) is wrong, you can simply bet against him or her by going long Harris. Although it’s not without risk – Harris still has to win for your bet to be profitable – if you thought his “real” odds were 55%, you would buy something worth 55 cents today for 40 cents. Even if you are not willing to do it, other market participants will. So if the Polymarket whale is indeed misinformed, now that we know it exists (potentially misinformed), one would expect the odds to decrease as traders integrate this new information. Unless of course the prediction markets are generally reliable and the whale hasn’t influenced them much.

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