Written by: Mahe, Foresight News
On February 28, the United States and Israel jointly launched airstrikes against Iran, resulting in the death of Iran’s Supreme Leader, Ali Khamenei. This attack shook Middle Eastern geopolitics. Even in the 21st century, war fires still spread everywhere, and its impact has caused a surge in prediction markets within the crypto world.
Polymarket and Kalshi have become another “battlefield” outside the actual conflict, where traders bet on the timing of attacks, regime changes, and ceasefires, with trading volumes soaring to astronomical levels.
War always has winners.
Polymarket has become a “barometer” of conflict. Since December last year, they have launched markets on “When will the US strike Iran,” covering various date options.
The prediction market “Will Khamenei step down before February 28?” saw a single-day trading volume of up to $95.93 million on February 28, making it one of the platform’s largest geopolitical markets, with a trading volume of $54.15 million on March 31.
After the attack was confirmed, this market quickly settled as “Yes” (still in the final dispute period), because Khamenei’s death directly led to his “resignation.”
Although currently Polymarket does not charge transaction fees on most regular markets (including politics, geopolitics, pop culture, and long-term macro events), in early 2026, Polymarket introduced fees for certain high-frequency trading markets. Under the expansion of brand influence, this has significantly boosted its revenue growth.
Additionally, Polymarket’s global version adopts a profit-based fee model. The core logic is: users do not pay fees when placing buy/sell orders daily, but when they realize profits, the platform charges a 2% net profit fee. This model only taxes “winners.”
For example, as shown in the chart, if the total net profit of winners is $10 million, the platform’s revenue from a single prediction market could reach $200,000.
Traders flock in, not only because of the thrill but also because these markets can reflect news in real time—much faster than traditional media. Once the attack news breaks, contract prices jump instantly, demonstrating the market’s “efficiency.”
There are always winners in war. Historically, those who profited from conflicts were often arms dealers, oil giants, or intelligence brokers—think of Lockheed during WWII or oil tycoons during the Cold War, who made fortunes through contracts and resource monopolies. Ordinary people? Mostly spectators; war meant loss and uncertainty for them. But today, crypto prediction markets have disrupted this pattern. Platforms like Polymarket allow retail investors to bet on geopolitical events—from the timing of US-Iran airstrikes to the probability of regime changes—with just a few clicks, they can share in the gains.
However, participating in this game also blurs moral boundaries. This shift is poignant: war “dividends” are spreading from physical supply chains to digital betting tables. Arms dealers still profit, but prediction markets turn ordinary users into new players. They don’t produce missiles but can “predict” explosions on the blockchain and profit handsomely.
As conflicts escalate, platform trading volumes surge, and the war economy has gone digital.
But this also raises many questions—does the thrill of making money diminish empathy for real suffering?
Kalshi, another player, has also taken a share. Their “Will Khamenei step down?” market has traded tens of millions of dollars (figures vary by source). On the day of the attack, trading volume spiked, reaching tens of millions of dollars in a single day.
However, Kalshi’s approach has sparked controversy. Their rules include a clause “no settlement in case of death,” meaning if a leader steps down due to death, the “Yes” contract is not fully paid out.
After the attack, Kalshi paused the market. CEO Tarek Mansour explained on X that they oppose profiting from personal death, so they will settle at the last trade price before death and fully refund all fees. Mansour emphasized this was to uphold “moral bottom lines” and prevent the platform from becoming a “death betting game.” Some users complained this was a temporary rule change, but Kalshi insists it was a pre-set clause, clarified just a day before the attack.
As a result, the platform lost money but gained a reputation for “not profiting from deaths.”
Polymarket’s high anonymity attracts global funds; Kalshi is more compliant but restricts markets related to war and assassination.
Yet, while most players bet based on intuition, some insiders quietly profit.
On Polymarket, some accounts’ timing of bets was so precise it raised suspicions of insider trading. Blockchain analysis firm Bubblemaps found that six newly created wallets bet on the February 28 US strike on Iran just hours before the event, collectively profiting about $1 million.
These six wallets, all created in February this year, concentrated almost entirely on contracts predicting the US attack timing. Some positions were opened hours before Tehran first reported explosions, with buy-in prices as low as about $0.10. Analysts say such concentrated betting before major geopolitical events resembles “suspected insider trading” seen in previous prediction markets.
However, reports also note that these accounts had previously lost money in other predictions, and the US government had publicly warned of possible military action weeks earlier. So, just based on timing, it’s insufficient to definitively prove illegal activity.
These are not isolated cases. Similar suspicions have arisen in the past, such as during the 2024 Super Bowl or Venezuelan events. But this time, the scale is larger, involving national security. The CFTC has previously warned about insider trading, and Kalshi recently faced penalties involving insider trading allegations against popular YouTuber MrBeast’s team member Artem Kaptur. Since Polymarket operates overseas with lax regulation, it has become a gray area.
US Congressman Ritchie Torres is pushing legislation called the “2026 Financial Prediction Market Public Integrity Act,” aiming to restrict government officials with non-public information from participating in related prediction markets. Meanwhile, Polymarket has faced regulatory restrictions or bans in countries including the Netherlands, France, Italy, and Singapore.
Of course, not everyone wins. Many have bet on the wrong dates and suffered heavy losses. Currently, Polymarket has updated its website to prominently feature all prediction markets related to the Iran situation.
Overall, this “war profiteering” exposes the double-edged nature of prediction markets: on one hand, providing real-time data and insights; on the other, being susceptible to manipulation and insider trading.
As everything becomes tradable, future prediction markets may require stricter regulation and clearer rules. After all, bets involve real money, but behind them are real lives.
