Policy shift shocks the prediction market, traders suffer huge losses; the crypto market is rebounding

【Crypto World】Trump’s policy shift caused the prediction market to explode. This week, the president canceled plans to impose tariffs on eight European countries and also announced the elimination of the possibility of military action against Greenland. This change directly impacted traders betting on aggressive policy enforcement— the probability of the U.S. annexing Greenland before 2027 plummeted from a high level to 11%.

One trader’s experience was particularly painful: originally betting $105,000 on “yes,” a sudden reversal led to a loss of $46,000. This situation actually reflects a common market pattern—industry insiders call it the “TACO trading” model. Simply put, Trump makes tough statements → the market follows suit with bets → policy suddenly shifts → traders pay the price. This cycle repeats over and over.

Interestingly, while the prediction market is experiencing turbulence, the cryptocurrency market is quietly rebounding. The total industry market cap increased by 1.5%, with all top ten cryptocurrencies in the green. The disconnect between policy risk and crypto asset trends also, to some extent, illustrates the market’s complexity.