Home›Crypto›Market Structure›Polymarket’s five-minute Bitcoin contract seen as weal…

Polymarket’s five-minute Bitcoin contract seen as wealth transfer

The study says the contract’s settlement against a Chainlink spot-price average allowed traders to influence the outcome by trading near the close, with over $4 billion in trading volume within months.

Reported · Written up by our desk · Market Structure

Bitcoin Magazine says a new academic study found that Polymarket’s five-minute Bitcoin binary contract functioned as a “wealth transfer” mechanism, moving money from retail bettors to a smaller group while also distorting Bitcoin’s spot price.

The paper, “Settlement Manipulation in Prediction Markets,” by David Dai, Ruizhe Jia, and Shihao Yu, examined a product Polymarket launched on February 12, 2026. The contract paid $1 if Bitcoin closed above where it opened over a five-minute window, and $0 otherwise, with a new contract opening every five minutes around the clock.

According to Bitcoin Magazine, the contract settled against a Chainlink oracle that averaged Bitcoin’s price across major spot exchanges. The study argued that a trader could buy or sell real Bitcoin in the closing seconds to “drag” the oracle reference price across the strike, enabling them to win.

Bitcoin Magazine also reported that within months, Polymarket’s five- and fifteen-minute Bitcoin up/down markets traded more than $4 billion and tripled the platform’s daily volume, and that net order flow in the final ten seconds before each close rose about 50% after launch. The report said the study found the pattern most clearly in Binance data, where price movements tracked the oracle closely and pushed outcomes across the resolution threshold about 85% of the time.

Latest closeBitcoin $65,023.41 ▲0.1%

More like this

Sources