If you had to put the entirety of your life savings on a single bet, what would it be? According to the Wall Street Journal, a 37-year-old tax economist named Alan Cole opted to bet that federal spending would continue to climb through 2025 despite Elon Musk’s Department of Government Efficiency pledging to slash budgets and reduce spending. To the surprise of no one except the fools who were on the opposite side of his bets on the prediction market Kalshi, Cole is richer now than he was a year ago when he first staked out his positions.
According to the WSJ, Cole poured a total of $342,195.63 into several predictions that all stemmed from the same basic premise: the federal government is going to keep spending despite Trump’s promise to balance the budget and Musk’s crusade against so-called “fraud” and “waste” (that ultimately turned out to just mean cutting programs that he didn’t like). When his bets ultimately resolved on February 20, when the Bureau of Economic Analysis published its final figures for the year, Cole reportedly had more then 3% of all positions in the federal spending market on Kalshi.
He ultimately cashed out for a total of $470,300, netting a total profit of more than $128,000, or 37%. That might sound a little light for a bet that saw him lock up his entire life savings in limbo for more than a year, but Cole apparently spread his risk out across several bets until he basically guaranteed himself that he wouldn’t lose anything unless the federal government managed to decrease spending by $50 billion. It increased by about $300 billion, so he had plenty of wiggle room to spare.
The thing about Cole’s bet is that it wasn’t so much a statement about Musk or his bluster—he just did the very simple math of determining Social Security, Medicare, and the military make up the majority of the federal budget, and DOGE’s cutting contracts and employees wouldn’t even put a dent in spending. But it was largely Musk fanboys sitting on the other side of the market, betting the world’s richest man would wipe out so much “waste” that he’d turn around the federal debt. They’ll go home with the Fell For It Again Award for their troubles, but no profits.
Betting against Musk diehards has become something of a free money hack on prediction markets. Earlier this year, an NBC News report highlighted how many prediction market whales have turned to betting against Musk as a way to make a quick buck because there is almost always a dedicated contingent of people betting on him to make good on his promises—which he rarely ever does, and certainly is even less likely to do so in line with his self-imposed deadlines.
Just keep this in your back pocket: If the markets tank, you can almost always get a reliable return by taking the opposite side of whatever Elon stans believe.
