This Looks Like an Insider Bet on Aliens
On Monday night, someone placed a peculiar bet on the prediction market Kalshi. At 7:45 p.m. eastern time, a single trader put down nearly $100,000 on the claim that, by the end of December, the Trump administration will confirm that alien life or technology exists elsewhere in our universe. According to The Atlantic’s review of Kalshi’s trading data, about 35 minutes after this bet was executed, it was followed by another that was almost twice as large (possibly from the same person). These were market-moving events: For one brief stretch, the market appeared to think that there was at least a one-in-three chance that the U.S. government will announce the existence of aliens this year. Perhaps this was just some overexcited UFO diehard with a hunch and money to burn. Or maybe, as some observers quickly noted, it was a trader with inside knowledge.
When this alien-prediction market first opened, in December of last year, it didn’t attract much action: By early this month, only about $1 million had been traded on it, a pittance compared with the $195 million that has so far been wagered on Kalshi for who will be the next chair of the Federal Reserve. But money started pouring in 10 days ago, after Barack Obama was asked, in a podcast interview, whether aliens are real and replied, “They’re real, but I haven’t seen ’em.” Although he later clarified on Instagram that he had meant only to suggest that in our mind-bendingly expansive universe of stars and planets, other life forms are very likely to exist, his remark had already made international headlines.
Trump seemed to get a kick out of Obama’s flub. A few days later, he accused the former president of leaking classified information and, in a post on Truth Social, directed Secretary of Defense Pete Hegseth and other parts of the federal government to “begin the process of identifying and releasing Government files related to alien and extraterrestrial life, unidentified aerial phenomena (UAP), and unidentified flying objects (UFOs).”
It’s possible that Trump was simply delighted by the prospect of a slow-drip document release that has nothing to do with him or Jeffrey Epstein. Either way, his announcement brought even more money into Kalshi’s aliens market. One gambling-industry site published some “X-Files” trading advice: Buy on the rumors of congressional hearings, then sell the moment that officials start dodging questions.
This week’s mysterious and mammoth bets did not get placed until a few days after this flash of interest had mostly gone away. From February 20 to the night of the 23rd, when the peculiar trades occurred, no further alien news was reported, no congressional hearings were held, and no rumors received significant circulation online. Whatever the Monday-night whales (or whale) knew—or thought they knew—it doesn’t seem to have come from the public-information environment, and no one has made bets of that size in the alien-prediction market since.
[Read: AI is getting scary good at making predictions]
The two wagers had some other unusual qualities. When high-volume traders stake out large positions on Kalshi, they tend to build them up incrementally in “slices” to avoid spooking other traders and driving up the price on themselves. Monday’s traders, though, plunked their money down all at once, and as a result, they paid more than they needed to. Also, their long-shot bets seem to have no obvious, strategic purpose. In theory, positions like these could be used as a hedge: A wager on an unlikely interest-rate shift or tariff might offset a business’s exposure to such financial news. But it’s hard to figure why anyone would feel a need to cushion against the downside risk of alien life (unless they were a publisher of science textbooks). The big “aliens exist” bets would make sense only if the traders actually believed that they would pan out, perhaps because they knew something about a hushed-up discovery that the rest of us are about to find out. When I asked Ben Shindel, an expert on prediction markets, about the trades, he told me that they could have been made by an inexperienced and sloppy trader. “The other possibility is that it’s an insider.”
Prediction markets are designed to convert private knowledge into public prices. Their proponents argue that they tell us more about the world than polls do (and certainly more than individual pundits do) because they aggregate the convictions of lots of people who have real money on the line. But certain features of the platforms—the possibility of enormous profits, the pseudonymous accounts, and the opportunity for crypto-based transactions—have made them magnets for insider trading. (Kalshi did not respond to a request for comment on this story.)
Today, Kalshi announced that it had taken action against an employee of the YouTuber MrBeast for improperly trading on markets having to do with the show, and reported him to government regulators. Earlier this month, Israeli authorities charged a civilian and a military reservist with using classified military intelligence to place bets on Polymarket related to Israeli operations. Last month, a new Polymarket account placed a large bet on Venezuelan President Nicolás Maduro being removed from power before the end of the month, and cashed out more than $400,000 after the U.S. military did just that. Members of Congress are starting to call for a ban on public officials making these bets. Some people are even using AI to surface large, suspicious trades that don’t correspond to any news, but this may become more difficult if trading volume continues to increase.
Shayne Coplan, the CEO of Polymarket, has described prediction markets as global truth machines. On subjects where official information sources are suspect, they may instead serve as paranoia generators. Thanks to a fair amount of government bumbling, and decades’ worth of pop culture, everyday Americans are already predisposed to assume that they’re being lied to about alien life. People seize on the tiniest scraps of evidence to justify their belief that Earth has already received interstellar visitors. They have put their faith in blurry pictures and videos, unverified rumors about crash sites and autopsied bodies. Even an offhand joke from a former president was eagerly interpreted as a long-hoped-for disclosure. And now someone, somewhere, is betting a small fortune that the truth is about to come out, and the rest of us are left to decide what, if anything, that actually tells us about the world.