As surprising events continue to unfold in the cryptocurrency market, the latest news comes from Ripple (XRP).
Accordingly, a trader on Polymarket profited $233,000 over the weekend by taking advantage of low liquidity in the XRP markets.
According to Coindesk, one investor made a profit of $233,000 by taking advantage of low liquidity and automated market maker bots on Polymarket over the weekend.
This strategy sparked debate about whether it crossed the line into market manipulation.
A shrewd trader using the alias PredictTrader on Polymarket began aggressively buying “UP” shares in the Polymarket contract on Saturday, asking whether the price of XRP would rise or fall.
Although the XRP spot price fell in response to these purchases, the buying activity intensified. This was because Polymarket bots, programmed to exploit price inefficiencies between the two markets, automatically sold more UP shares as the UP share price rose, even when the XRP price fell.
Thanks to this, this investor managed to buy 77,000 UP shares at an average price of 48 cents.
Continuing with his plan, two minutes before the market closed, a Binance wallet allegedly linked to the investor made a large purchase of $1 million worth of XRP. This caused the XRP price to rise by approximately 0.5%.
This small jump in the XRP price resulted in a profitable outcome for the Polymarket contract, with UP shares selling at $1 per share. This event resulted in a significant profit for investors with an average purchase cost of 48 cents.
Finally, the investor sold the XRP he had purchased on Binance, causing the spot price to fall again.
In conclusion, these events have highlighted the need for smarter algorithms and clearer rules in prediction markets.
*This is not investment advice.
