Wall Street’s Big Bet on Trump: Bitcoin, Gold and Oil

Photo: AFP via Getty Images

On October 29, a week before the election, a California hedge fund manager let me see some of the deals he had made leading up to the event. On that day, the chances of Donald Trump victory in the presidential elections Polymarketoffshore betting site, hit its highest level of 67 percent since then Kamala Harris entered the race. One of his chosen, he said, was the GEO Group, a private prison company. As it happened, GEO shares traded in roughly the same pattern as the Trump odds, reaching a high not seen since mid-July.

“A very controversial action. Many managers do not want to own it because they consider it evil. They own private prisons, run detention centers and track migrants crossing the border,” a hedge fund manager told me on condition of anonymity. “But us? We remember what stocks did after Trump’s victory last time. After the elections, it doubled. I mean it doubled in size. And, by the way, we remember what happened to him a year later. It lost all its value, and then more.”

Is there anyone left on Wall Street who thinks Kamala Harris is going to win? A few days before the election, it seems that everyone in the world of finance is from a billionaire investor Ken Griffin a convicted fraudster Martin Shkreli — predicts Trump will beat his opponent to win his second trip from Mar-a-Lago to the White House, and they’re betting accordingly. The capitalist class expects the kind of pro-entrepreneurship, tax-cutting, up-and-coming economy that has characterized all but the last year of Trump’s first term. Bitcoin, gold, oil companies and health insurers hit or near all-time highs as money managers scrambled to position themselves in assets they believe will rise after news of Trump’s victory. “They’re trading gold, they’re trading bitcoin, they’re trading every asset in sight, and they’re taking the crap out of bonds,” a hedge fund manager told me. (Trump tariff-heavya low-rate economic program is expected to lead to higher inflation, making bonds less valuable to hold over the long term).

Of course, there are well-known Democrats among the financier class Raymond McGuirepresident of Lazard, Mark Lasry of hedge fund Avenue Capital and billionaire owner of the Dallas Mavericks Mark Kuban. Jamie Dimon, the longtime CEO of JPMorgan Chase, reportedly told friends privately he supports Harrisalthough he publicly maintains neutrality. Another hedge fund source told me that it has become less culturally acceptable to be considered a liberal this year, especially since Bill Ackman’s speech against DEI programs. It’s unclear whether they’re bucking the trend and investing in a presumed Harris victory, staying on the sidelines, or quietly positioning themselves for another Trump administration.

Investors have been doing this sort of thing—trying to anticipate how a big event will unfold and invest accordingly—for millennia. But there is something new about the 2024 election; it is significantly more financial than any previous in US election betting, which became legal last month, has created a whole new dimension for force makers and investors. Polls show a clear victory, but betting sites such as Polymarket and Kalshi have Trump close to a two-to-one favorite. For some investors, the betting odds actually overshadowed the survey. “Many market participants I speak to are set on an almost certain Trump victory. When I ask them why, virtually every single one of them points to the move in betting markets from September to October in the direction of Trump.” – Jim Chanos, a well-known hedge fund manager, wrote on X.

But these are not just betting odds. Bitcoin (which is now Trump supports) traded above $72,000, near a new all-time high. Gold is at $2,781 per ounce, also a new record high. ExxonMobil is trading near a peak after John Paulson, another hedge fund manager widely seen as Trump’s Treasury Secretary pick, said he eliminate subsidies for solar and wind energy. United Healthcare, one of the largest insurers in the US, is also near its all-time high after Republican Speaker Mike Johnson vowed to kill Obamacare. The S&P 500 is up 10 percent since early August, when Harris’ odds of winning Polymarket were much closer to 50 percent. (Promotions on Thursday lost about 1 trillion dollars in the market value, mainly for heating earnings on equipmentbut it probably didn’t help the average rate either jumped for a democrat too).

And then there’s Trump Media & Technology Group, the ex-president’s parent company for his Twitter clone. The company was in crisis for most of October, with its stock price more than quadrupling from an all-time low. At its peak, its value exceeded $10 billion. (It has since lost about a third of its market value). Trading under the ticker DJT, the company is a wildly volatile meme stock whose core business — social media and streaming for conservatives — is largely considered irrelevant. “If Trump wasn’t involved, the stock would be worthless,” Greg Bowden, an active stock trader. told me in August DJT’s recent rise, according to traders, reflects an actual increase in DJT’s chances of winning.

All these indicators, however vague and unscientific they may seem, have created a dilemma for investors. Traders tend to trust the markets. “The money is usually right,” a hedge fund manager told me. Even if a particular trader doesn’t think Trump will actually win, he may be tempted to play the action — staying away could leave money on the table.

But there are legitimate questions about bias: bettors tend to be men, who make up a smaller proportion of the electorate, and Polymarket operates on a cryptocurrency that is still quite extreme for the population. Add to that the unregulated nature of some of these sites, and the odds seem much less certain. The researchers found that Polymarket was full counterfeit tradeaccording to Fortune, though it’s not clear whether these deals are actually skewing the results. There seem to be a few traders placing big bets on Trump, while bets on a Kamala Harris victory seem to be more evenly spread among users, in accordance to a prolific Polymarket trader called Domer.

Right now, there’s no telling if the odds reflect groupthink or just smart money. “Wall Street does not want the Democrats to win. Let’s call it what it is. It’s not fear. This is actually what they want. That’s their preference,” a California hedge fund manager told me. “I have a feeling, man, that the price of gold is going to plummet on election day. It doesn’t matter who wins. All those involved in these one-sided trades will be wiped out immediately after the election.”