Pro-Trump whale Fredi9999 is shifting Polymarket odds
A single crypto wallet is trading tens of millions of dollars on Polymarket, a crypto-friendly prediction market. The trader, known by its social handle Fredi9999, has transacted over $73 million worth of mostly pro-Donald Trump bets and currently has $12 million on the line for Trump winning the election on November 5.
Although higher frequency traders have transacted larger volumes on an absolute basis, Fredi9999 is the site’s most profitable crypto wallet this month and second-most profitable trader of all time.
As the trader climbed the Polymarket leaderboard, it attracted media scrutiny for its political motivations. Specifically, some people believe that the trader’s wealth is creating a 5-8% ‘Fredi premium’ on Polymarket’s 2024 US presidential election market. Others estimate its impact at an even higher 13%.
Because changing prices in liquid markets cause a variety of emotional and non-quantifiable changes in traders’ behavior, it is impossible to determine the exact impact of Fredi9999 on Polymarket’s odds.
Nevertheless, a professor at American University explained to Newsweek, “If Fredi9999 has business interests that stand to lose from a Trump victory, they could be betting on one to offset those potential future losses.”
Read more: Prediction markets like Polymarket triple despite US ‘ban’
Others are less certain that traders like Fredi9999 are risking it all on Trump. There is speculation that Fredi9999 is not a lone actor but rather a member of a sophisticated group that hedges their bets or farms for airdrops through market-neutral portfolios.
Cashing in on Donald Trump’s presidential campaign
If the rumor is true, it would certainly not be an isolated occurrence of wealthy traders cashing in on Trump’s election odds. Degenerate proxies for Trump have rallied to inexplicable valuations. The largest TRUMP meme coin, which confers no rights to token holders whatsoever, is worth $234 million. A token named MAGA Hat is worth $73 million while Super Trump is worth $20 million.
On regulated capital markets, examples increase from the millions into the billions. Consider Fannie Mae and Freddie Mac, the world’s largest mortgage companies whose profits are continually swept into the US Treasury per a government conservatorship that Trump wants to terminate.
Dozens of common and preferred classes of the companies, which sunk to a 10-year low after Trump lost the 2020 election, have added billions of dollars in market capitalization over the last 12 months as his odds of electoral victory increased.
Another example is Trump Media, the publicly traded owner of Trump’s Truth Social network. Despite Trump Media’s mere $4.1 million in trailing 12 month (TTM) revenue, speculators have nevertheless bid up its market cap to $5.8 billion — a stupefying 3,589 times sales.
In the end, it is difficult to know whether Fredi9999 is a single crypto wallet owned by one discretionary trader, or whether it is cooperating with hundreds of other traders. Although Polymarket’s leaderboard claims it has $12 million on the line for Trump to become the next US President, the person(s) controlling the wallet and its other financial assets might have other motivations.
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