Till the ultimate hours of the Netherlands’ Oct. 29 election, Polymarket merchants had been satisfied Geert Wilders’ nationalist Partij voor de Vrijheid (Social gathering for Freedom) would cruise to victory.
The market barely budged as Rob Jetten’s social liberal Democraten 66 (Democrats 66) climbed in each main ballot. Then, inside minutes of the primary exit ballot, D66 odds exploded from 5% to 100%, wiping out thousands and thousands in overconfident PVV longs.
With 98% of votes counted, D66 and PVV had been each projected to take 26 seats within the 150-seat decrease home of parliament, Reuters reported Thursday. That is a lack of 11 seats for PVV.
Kalshi wasn’t significantly better, with merchants overpricing Wilders’ PVV till election day.
Information from Polymarket Analytics suggests the markets grew to become a check of conviction reasonably than foresight as merchants clung to dropping PVV bets out of perception. Many held static positions for weeks whereas a smaller group of data-driven individuals quietly profited from the late D66 surge.
Throughout the latest U.S. presidential election, all kinds of theories emerged about why Polymarket was giving a premium to now-President Donald Trump. Maybe it was the participation of crypto holders, who are likely to lean proper.
One idea was that overseas cash was making an attempt to affect the vote by skewing markets. This idea was amplified when a French nationwide utilizing the deal with “Theo” unfold out pro-Trump and pro-Republican bets over numerous accounts.
Theo, it turned out, had no political agenda, as he informed the Wall Road Journal. As a substitute, the self-described rich banker decided nationwide polling had gaps and as an alternative commissioned his personal, which concerned pollsters asking respondents who they thought their neighbors would vote for.
The survey confirmed his thesis that the polls had been unsuitable about Trump’s possibilities of victory, and he was assured sufficient to place $30 million in.
However for the Dutch election, there was no Theo. There have been numerous conviction merchants who acted as efficient counterparties with exit liquidity.
Accounts like “WhiteLivesMatter” — whose username displays their political opinions — poured tens of 1000’s into PVV “sure” contracts and by no means flinched, at the same time as Ipsos and Peil.nl polls shifted decisively towards D66.
The positions sat unchanged for weeks, in line with Polymarket Analytics. It wasn’t lack of understanding that doomed them, however a refusal to course of it.
That static posture contrasted sharply with merchants like “Wisser” and “ciro2”, who moved early on late polling knowledge and made six-figure earnings from the identical volatility that crushed the PVV devoted. These individuals used the market as a rational actor would, trying to make cash with trades, not a scoreboard for ideology.
Ultimately, the prediction markets labored as mirrors, not predictors, reflecting the biases of their customers. The place Theo used polling to problem consensus, some merchants ignored it solely.
In a market with skinny liquidity, the outcome was a real-time experiment in how markets could be rational in idea but irrational in follow, particularly when conviction outweighs curiosity.
Learn extra: Polymarket is 90% Correct in Predicting World Occasions: Analysis
