A savvy trader reportedly pulled off a hugely profitable move on the predictions platform Polymarket, pocketing $233,000 and outfoxing automated bots during quiet weekend trading. This exploit has captured a lot of attention, with some experts calling the strategy outright manipulation that may need disciplinary action. The incident took place late Saturday night. This is a time when trading volumes across the crypto world are usually low, meaning even small orders can move market prices in a big way.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
How the Trader Cornered the XRP Market
According to data shared by the researcher “PredictTrader,” the user known as @a4385 executed a multi-step plan targeting an XRP price (XRP-USD) contract. The trader began by aggressively purchasing “UP” shares. These shares pay out if the price of XRP rises during a specific 15-minute window on January 17. Because the weekend market was so quiet, this buying pressure pushed the price of UP shares to 70 cents. At the same time, the actual price of XRP on major exchanges like Binance was slightly falling.
Outsmarting the “Dumb” Bots
The key to this strategy was exploiting how automated bots react to price gaps. These bots are programmed to provide liquidity. They sell shares when prices rise and buy when they fall. In this case, the bots kept selling “UP” shares to the trader because the internal Polymarket price was rising. However, the outside world showed XRP getting cheaper. This allowed the trader to stockpile 77,000 shares at an average cost of just 48 cents each.
It Was a Timely Million-Dollar Spike
Just two minutes before the contract was set to end, a Binance wallet linked to the trader made a sudden $1 million purchase of XRP. This massive buy order bumped the price up by about 0.5 percent. That was just enough to ensure the Polymarket contract settled in the “UP” position.
- The Payout: Each of the 77,000 shares jumped from a 48-cent cost to a $1.00 payout.
- The Efficiency: The trader’s actual cost to nudge the market was only about $6,200 in trading fees. Meanwhile, the profit was over $230,000.
- The Aftermath: Once the contract settled, the trader immediately sold the $1 million in XRP. This sent the price right back down to where it started.
The Episode Has Sparked Calls for Stronger Rules
This episode has sparked a fierce debate about the future of prediction markets. Chris Tremulis, the head of commodities compliance at Goldman Sachs, argued that these platforms need much stronger rules to get big institutions to join. He suggested that “prioritizing market integrity will be key” for these platforms. He also called for faster investigations and for these cases to be sent to the CFTC. Analysts now suggest that bots need to become smarter so they don’t fall for the same trap in the future.
To put it simply, this wasn’t a lucky guess. It was a carefully timed financial attack. By moving a small amount of money in the big market to win a huge amount of money in the small market, the trader proved that these new platforms are still very vulnerable.
At the time of writing, XRP is sitting at $1.9752.
