Prediction market users have profited from bets on U.S. and Israeli military strikes against Iran, with $529 million traded on Polymarket in contracts tied to the timing of the attack.
The significant trading volume and specific profits have raised questions about the use of insider information in decentralized markets. An analysis by analytics firm Bubblemaps SA found that six newly created accounts correctly bet that the U.S. would strike Iran by Feb. 28, earning a collective profit of $1 million. Bubblemaps CEO Nicolas Vaiman suggested that the anonymity of Polymarket creates an environment where informed participants can act on sensitive intelligence. “The circulation of information involving war or conflict… can create incentives for informed participants to act early,” Vaiman stated.
Similar speculative activity occurred in January regarding the leadership of Iran. Analytics firm Polysights noted a spike in bets concerning the likelihood that Supreme Leader Ali Khamenei would no longer hold his role by the end of March. Khamenei died in March. These markets have drawn scrutiny for potentially placing financial incentives on violent geopolitical events.
Kalshi CEO Tarek Mansour addressed concerns regarding markets that appear to incentivize assassination. Mansour stated that his platform does not list markets directly tied to death. “When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death,” Mansour said. He added that Kalshi reimburses all fees from such bets.
Polymarket is a decentralized prediction market platform built on the Polygon network. The platform allows users to bet on real-world events using cryptocurrency. Bubblemaps SA is a blockchain analytics firm that visualizes on-chain data. Kalshi is a U.S.-based prediction market platform regulated by the CFTC.
