A Polymarket trader using the handle 0xA2 has topped the platform's daily leaderboard with $917,000 in profits after Democrats won control of both the House of Representatives and the Senate in the U.S. midterm elections, according to the site's daily leaderboard.
Most of those gains remain unrealized, tied to an active market that Republicans will not win any Senate swing states. The market has moved sharply in 0xA2's favor but still carries risk as Alaska awaits a final result.
Big bet on Senate swing states
0xA2 wagered $609,644 on the Republicans not winning any Senate swing states when odds stood at 36%. That market has since surged to 87%, turning the stake into $1.48 million and putting the trader $860,000 in the green on the position.
Those profits are unrealized and could change at any moment while Alaska's outcome is pending. Polymarket traders currently assign a 14% chance to an upset in the state.
The trader also realized $106,115 in profits by predicting that Democrats would win the Texas Senate. Separately, 0xA2's second-largest active position is $1.42 million on the U.S. not confirming that aliens exist before 2027.
Prediction markets see heavy midterm activity
The midterms drew significant volume to leading prediction markets Polymarket and Kalshi. According to Prediction.com data, midterm markets attracted more than $546 million in notional volume over the past two weeks.
"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 profitable day for many Polymarket users: the top 10 traders on the platform each profited more than $170,000, per the leaderboard. For comparison, 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.
Elections remain a key driver
"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. Prediction market users have taken such activity as a sign that prediction markets can be 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 are not always accurate. Two weeks ago, Polymarket predictors gave Luiz Inácio Lula da Silva about a 20% chance of winning Brazil's presidential election 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, and 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.
That 14% chance that 0xA2 loses the $860,000 in profit should be taken seriously.
