Ethereum Founder Vitalik Buterin Earned $70K Betting Against Market Hype on Polymarket
Ethereum co-founder Vitalik Buterin has pulled back the curtain on how he trades on prediction platform Polymarket—and his approach is the opposite of chasing hype. Instead of betting on spectacular outcomes, he systematically wagers that the most sensational, panic-driven, or absurd scenarios simply will not happen.
In a recent interview, Buterin explained that he scans Polymarket for contracts he describes as being in “crazy mode” and then positions himself on the side of normality. In his words, he bets that “crazy things won’t happen.”
He offered examples of the types of markets he targets:
– Contracts asking whether a polarizing politician like Donald Trump will win the Nobel Peace Prize.
– Markets created during moments of financial stress that speculate the U.S. dollar will collapse to zero within a year.
These outcomes are technically possible, but extremely unlikely. When fear or excitement runs hot, some traders are willing to pay surprisingly high prices to bet on them anyway. That, according to Buterin, is where he steps in.
How Much Is Vitalik Making With This Strategy?
Buterin said that in 2025 alone he has earned about 70,000 dollars in profit on Polymarket. He did this by deploying roughly 440,000 dollars in capital, which works out to a return of around 16%.
For a professional investor, 16% on a sizable sum in less than a year is a strong result, especially for a strategy based on probability and risk management rather than high-leverage speculation. It also suggests that even in relatively sophisticated on-chain prediction markets, strong emotional swings still create mispriced odds.
Buterin summed up his experience bluntly: his method of betting against extreme sentiment “usually makes money.”
What Does “Crazy Mode” Mean in Practice?
When Buterin talks about “crazy mode,” he is referring to situations where the market price of a prediction appears disconnected from a sober assessment of reality. Typical features of these markets include:
– Extremely low-probability events being priced as if they are reasonably likely.
– News-driven hysteria, where a shock headline pushes people into betting on disaster scenarios without carefully checking the odds.
– Narrative-driven hype, where a story feels so emotionally compelling that traders ignore basic statistics and base rates.
In prediction markets, each contract’s price represents the implied probability of an event. If a contract trades at 20 cents, the market is implicitly saying that there is a 20% chance of the event happening. Buterin’s strategy hinges on finding markets where this implied probability is much higher than he believes is justified.
For example, if a contract speculating that a major currency will collapse is trading at 10% or 15% odds at a time when underlying fundamentals do not support such a scenario, that can look attractive to someone willing to bet on stability instead of chaos.
Why This Strategy Can Work
Buterin’s approach leans heavily on a classic idea from behavioral finance: people systematically misjudge low-probability events, especially under stress or excitement. Some common psychological patterns support his strategy:
– Overweighting dramatic outcomes
Traders pay too much for “lottery ticket” bets—events that are unlikely but attention-grabbing.
– Panic during crises
When fear dominates, even relatively improbable worst-case scenarios can be priced as if they’re almost expected.
– Hype during euphoria
In bull markets and political dramas, some participants convince themselves that unprecedented outcomes are just around the corner.
Prediction markets are designed to aggregate information, but they are still made up of humans reacting to headlines, emotion, and social pressure. That opens the door for calmer participants—like Buterin—to take the other side when the crowd swings too far.
The Role of Capital and Risk Management
It is important to note that Buterin is not casually throwing small sums at meme bets. He mentioned allocating about 440,000 dollars to this strategy. With that level of capital, his focus appears to be:
– Risk-adjusted return, not just absolute profit.
– Spreading bets across many different markets where probabilities look skewed.
– Accepting that some “crazy” events will still happen, but trusting that across dozens or hundreds of predictions, the math will favor him.
Even if a low-probability shock occasionally does occur, the logic is that the profits from correctly betting against dozens of other “crazy” markets should more than offset those rare losses.
How Polymarket Fits Into the Picture
Polymarket is a blockchain-based prediction platform where users trade on the outcomes of real-world events—anything from elections, court cases, and macroeconomic indicators to public figures winning prizes or meme-like scenarios. Each market’s price reflects expectations about whether a specific event will happen.
Buterin’s participation highlights several trends:
– Prediction markets as information tools – They don’t just provide opportunities to profit; they act as a crowd-sourced gauge of what people think is likely.
– Crypto-native financial experimentation – Platforms like Polymarket blend decentralized infrastructure with speculative trading around news and events.
– On-chain transparency – Positions and payouts are ultimately settled in a verifiable way on public ledgers, aligning with Ethereum’s broader ethos of openness.
What Regular Traders Can Learn From Buterin’s Approach
Buterin also encouraged other market participants to pay attention to situations where emotion appears to dominate rational calculation. Without prescribing a detailed playbook, his comments suggest several practical takeaways:
1. Be suspicious of extremes
If a market is pricing near-apocalyptic or near-utopian scenarios with surprisingly high probabilities, it could be a sign that sentiment has overwhelmed sober analysis.
2. Check the implied odds, not just the story
A bet that sounds “obvious” may be terrible value if the price already assumes a high chance of it happening.
3. Use base rates and history
Events that have almost never happened before—such as reserve currencies collapsing overnight or wildly improbable awards being given—tend to remain rare. Markets sometimes forget that.
4. Diversify across many small edges
A strategy like Buterin’s isn’t about winning one giant trade. It’s about repeatedly taking modestly favorable odds across many markets.
5. Stay emotionally detached
Prediction markets reward clear thinking. The more a trader is driven by fear, anger, or partisan loyalty, the more likely they are to misprice risk—and the more opportunity they may present to those who stay calm.
Limits and Risks of Betting Against “Crazy”
Despite his confidence that the strategy “usually makes money,” Buterin’s own comments implicitly acknowledge that he is not claiming to predict the future with certainty. Even improbable scenarios happen occasionally:
– Political shocks, black swan financial events, or sudden shifts in public sentiment can flip a “crazy” long shot into reality.
– Liquidity in some niche markets can be thin, meaning exiting a position at a fair price is not always guaranteed.
– Regulatory and legal scrutiny around prediction markets adds another layer of uncertainty for participants.
Betting against extreme outcomes is not a guarantee of profit—it is a probabilistic strategy that requires discipline, patience, and an understanding of risk.
What This Reveals About Buterin’s Philosophy
Buterin’s trading style on Polymarket seems to echo the philosophy he has articulated for years regarding technology and society:
– Skepticism of hysteria and overreaction – Whether it is speculative manias in crypto or doom-laden predictions about technology, he consistently advocates for measured, evidence-based thinking.
– Long-term focus – A willingness to ignore short-term noise aligns with how he thinks about building Ethereum and the broader ecosystem.
– Use of markets as tools for truth-seeking – He has often expressed interest in mechanisms that help societies reason better about the future, and prediction platforms are a natural extension of that interest.
His disclosure is not only a trading anecdote but also a demonstration of how markets can reward those who resist emotional extremes in favor of probability and rationality.
The Bigger Picture: Prediction Markets and Market Efficiency
Buterin’s 16% gain on a large stake raises a broader question: how efficient are prediction markets right now?
If an experienced observer can repeatedly find “crazy mode” mispricings, it suggests:
– Room for improvement in market efficiency – There may not yet be enough sophisticated capital actively arbitraging away emotional distortions.
– A learning curve for participants – As more users understand probability, base rates, and behavioral biases, some of these easy opportunities may shrink.
– Ongoing value as forecasting tools – Even with imperfections, these markets can still offer a more nuanced picture of public expectations than polls or headlines.
In that sense, Buterin is not only a trader but also a kind of real-time auditor of how rational or irrational these markets are at any given moment.
Conclusion: Profit in Betting on Normality
Vitalik Buterin’s experience on Polymarket underlines a simple but powerful idea: in environments dominated by emotion, calmly betting on the world remaining mostly ordinary can be surprisingly profitable.
By systematically targeting contracts where panic or hype drives up the perceived chances of highly unlikely events, he has turned a 440,000-dollar allocation into around 70,000 dollars of profit this year. His results highlight both the promise and the imperfections of prediction markets—and they serve as a reminder that, in finance as in life, resisting “crazy mode” often pays.