Crypto Bettors Burn Millions on Failed Pope Predictions as Polymarket Hype Crashes

Polymarket’s latest ’wisdom of the crowd’ experiment goes up in smoke—turns out even blockchain can’t divine the Vatican’s secrets.

Betting markets promised decentralized foresight, but delivered another expensive lesson in crypto’s favorite pastime: speculative self-immolation.

Bonus jab: At least the losses are tax-deductible... if you can untangle the DeFi accounting nightmare.

What went wrong?

The reason Polymarket bettors got the papal conclave result so wrong is that the event is extremely hard to predict, Domer, one of Polymarket’s top pseudonymous bettors, said on X.

“It’s like walking into a store that doesn’t communicate with the outside world,” he said. “Not even the participants themselves WOULD probably know how to handicap it.”

Since it’s hard for bettors to find an edge with such an esoteric bet, many likely defaulted to following the opinions of traditional betting markets and the media, resulting in the close alignment of odds between Polymarket and other betting markets like Betfair.

The rarity of papal conclaves may also have made things difficult.

Pope Francis, the previous pope, was appointed in 2013, years before blockchain-based betting platforms like Polymarket existed. It’s also possible that many Polymarket bettors likely had no prior experience betting on the event.

Political elections, where Polymarket odds have lined up closer to results, are much more frequent and widely understood.

According to Domer, the real edge in betting on the papal conclave is not choosing the correct candidate but rather betting against those with too-high odds.

He chalked up the high odds of heavy favorites Parolin, and Cardinal Luis Antonio Tagle, who Polymarket bettors gave a 20% chance of winning, to their popularity with the public and the media.

"The pricing for Parolin and Tagle were way too high, and high for not very good reasons,” he said.