Tensions are boiling in the Middle East, yet the most profitable traders on Polymarket are positioned for de-escalation.
Why Polymarket Whales Are Fading The Heat
In the last 48 hours, the evidence for an imminent conflict has mounted rapidly.
President Trump says the US has deployed what he calls a “massive armada,” including the USS Abraham Lincoln carrier strike group, to the region to “re-establish a credible military threat.”
Moreover, the EU has officially designated the IRGC as a “terrorist organization”, while Iran issued a “Notice to Airmen” (NOTAM) for live-fire naval drills in the Strait of Hormuz on February 1-2, directly threatening the world’s most critical oil chokepoint.
Despite this perfect storm of escalation, prediction markets are flashing a counter-intuitive signal.
On Polymarket, the implied probability of a U.S. strike by February 28, has pushed to around 52% as escalation headlines piled up.
But market analytics data show that the highest-profit accounts are building positions on the No side.
The top ten holders of No have over $5 million in profits between them.
By contrast, many large Yes positions come from accounts with weaker historical performance.
The “Art of the Deal” Theory
The smart money appears to be pricing in a specific thesis: diplomacy by force.
Veterans are betting that the military buildup is not a prelude to invasion, but a high-stakes leverage play to force a new nuclear deal.
Reports indicate Iranian Foreign Minister Abbas Araghchi is traveling to Turkey for urgent mediation talks, while Trump has explicitly signaled he wants a “fair deal” to denuclearize Iran.
Polymarket whales are wagering that the current escalation is “maximum pressure” designed to bring Tehran to the table, not to the battlefield.
What Happens Next
If the “whales” are wrong, the downside may result in worst-case scenarios, such as the Strait of Hormuz being disrupted for global shipping.
Oil prices are modeled jumping into the $110–$130+ range under such a scenario.
Image: Shutterstock
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