Cryptocurrency enthusiasts who placed their bets on the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) before January 15 are now celebrating their winnings, as the U.S. Securities and Exchange Commission (SEC) gave the green light to 11 such ETFs.
Over $12 million was wagered on the outcome of this event on the Polygon-based decentralized predictions market, Polymarket. However, there has been some controversy among those who bet against it, as they dispute the terminology used in the SEC’s official statement.
The big bet
In early December 2023, Polymarket became the arena for a high-stakes prediction market, where participants could place bets on whether the SEC would approve spot Bitcoin ETFs before January 15, 2024. The wagers totaled a staggering $12.6 million, with participants choosing “YES” or “NO.”
On January 10, the SEC made a historic decision by approving the trading and listing of 11 spot Bitcoin ETFs. This announcement marked the conclusion of the prediction market, with those who bet “YES” emerging victorious.
Quibbles over terminology
While many rejoiced, some disgruntled bettors who had wagered “NO” voiced their objections. They argued that the bet was still ongoing due to what they perceived as a discrepancy in terminology. According to these dissenting voices, the SEC’s official statement referred to “exchange-traded products,” not explicitly to ETFs.
Polymarket had initially stated that the primary source for resolving the market would be information from the SEC. Still, they also reserved the option to consider a consensus of credible reporting. This stance left room for interpretation and now becomes a point of contention for those who had bet against the spot Bitcoin ETF approval.
Surge in prediction market activity
Leading up to the highly anticipated SEC decision, prediction market activity experienced a significant surge. Dune Analytics reported that on January 10, Polymarket saw more trading volume than OpenSea, a prominent nonfungible token marketplace. Polymarket’s volume reached $5.7 million, surpassing OpenSea’s $3.9 million.
Spot Ether ETF prediction
Polymarket is not stopping at Bitcoin. It also offers a prediction market for approving a spot Ether (ETH) ETF by May 31. However, the level of engagement in this prediction market is notably lower. Only $4,155 has been wagered on the outcome, with the “YES” votes leading by 75%. Polymarket’s candid commentary suggests that those who haven’t bet on the Ether ETF approval “simply aren’t bullish enough.”