A recent academic study suggests there may be price manipulation in short-term crypto prediction markets. The researchers say some traders could have moved Bitcoin prices on Binance to gain an advantage in Polymarket contracts. Scholars from Stanford University and Singapore Management University looked at Polymarket’s five-minute Bitcoin prediction contracts and found signs that coordinated trading near settlement times may have shifted millions of dollars from regular traders to a small group of experienced ones.
The paper, called Settlement Manipulation in Prediction Markets, looked at on-chain activity and Binance spot market trades after Polymarket launched five-minute Bitcoin binary contracts in February 2026. The researchers noticed that trading activity spiked in the last seconds before contracts settled, causing short-lived price changes that reversed soon after settlement.
The authors believe these quick spikes in price probably did not reflect real market news. Instead, they think the goal was to move Bitcoin prices just enough to affect contract results. Their analysis found about 1,600 settlement periods that showed signs of manipulation. In these cases, contracts that were usually balanced changed outcomes much more often than during normal trading.
The study estimates that about 821 wallets regularly profited during these suspected manipulation events, earning around $8.2 million over two months. Most of the losses fell on retail traders, while market makers were mostly not affected.
The researchers also found that manipulation was much less common in Polymarket’s fifteen-minute Bitcoin contracts. They say longer settlement periods make last-second price moves less effective and help real price discovery. The paper suggests making contracts longer, using different pricing oracles, or adding volume-weighted settlement methods to lower the risk of manipulation.
This study comes at a time when prediction markets are growing quickly in the crypto industry. The research does not accuse Binance of any wrongdoing, but it raises bigger questions about how these markets are designed and the risks of very short-term crypto prediction products. Regulators may pay more attention to these issues as blockchain-based prediction markets keep expanding.
Study Finds Signs of Manipulation in Bitcoin Bets on World’s Largest Prediction Market
Researchers from Stanford University and Singapore Management University found signs of settlement manipulation in Polymarket’s popular five-minute Bitcoin prediction markets. After analyzing… pic.twitter.com/ZWYmqJk4ie
— Wu Blockchain (@WuBlockchain) July 16, 2026
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