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Inside traders may have profited from Venezuela invasion

Recently, we reported on the rise of so-called ‘prediction markets’. While these sites claim they’re not gambling, they are for all intents and purposes gambling. The key difference is they allow people to gamble on real-life events rather than simply sports. This is why we’re now seeing dystopian occurrences like the following over Venezuela:

Gamblification on Venezuela

The difference between prediction markets and gambling is that in the former, users are buying stocks in a question. The difference in value between the ‘yes’ traders and the ‘no’ traders determines the odds.

Given that people are gambling on real-life events, there’s obviously an opportunity for people with inside knowledge to game the system. If you were part of the Trump administration, for example, you could put your money on Venezuelan president Maduro being forced out, knowing that plans were afoot to abduct him. You could also be a close relative of Trump who happens to be a strategic advisor to Kalshi (one of the two main prediction markets):

Oh, and Trump Jr. is also an investor in the other prediction market, Polymarket:

Regarding ‘insider trading’, people have highlighted that it’s actually encouraged to an extent:

Kalshi’s founders have spoken about inside traders being an advantage because it means the predictions end up being more accurate, as Coffeezilla covered in the following video:

Trade wars

Prediction markets recently became more well known because of the following:

It attracted so much attention because it perfectly encapsulates what we all know to be true; that no matter what goes wrong in the world, the rich always profit, because the system is stacked in their favour.

Creating financial markets from division is the obvious end point to this sociopathic culture.

Featured image via Pexels

 

By Willem Moore

This post was originally published on Canary.