On January 3, the world watched in disbelief as Venezuelan President Nicolás Maduro was captured by US forces. It was a dramatic geopolitical event that would resonate not only in Washington and Caracas, but also in global financial markets.
Financial speculation erupted on prediction platforms, bond markets and even cryptocurrencies. It was a frenzy that, for some, translated into huge profits, something I have been watching closely since 2023.
At the same time, Donald Trump’s personal wealth was reported to have soared amid broader changes in financial markets and his own cryptocurrency ventures. It was reported that the value of the US president’s cryptocurrency-related holdings could have increased by $140 million (£104 million) following the foray into Venezuela. This fits into a broader trend of rapid growth in digital assets linked to the president and his family.
What this episode reveals is not just how geopolitics shape markets, but how intertwined political power, speculation, and personal wealth have become. This matters not only to investors, but also to ordinary citizens. The future of the world has rarely been so uncertain, but according to American economist Frank Knight, uncertainty is the path to profit.
Prediction markets are platforms where people bet on political or real-world outcomes. Users can buy and sell shares that represent yes/no answers about the outcome of anything from sporting events and celebrity news to political changes. On Polymarket, an online prediction market, an anonymous trader turned a bet of about $34,000 into more than $400,000 betting that Maduro would be removed from office before the end of January.
However, Polymarket later announced that bets on Maduro’s capture did not qualify and that it would not pay out. In a statement, they said the bet concerned “US military operations aimed at establishing control” in Venezuela.
More context: Who really governs Venezuela?
Still, the potential benefit shook the financial press. How did this platform user know? Were you lucky or did someone with inside information get there first? This has fueled debate over whether prediction markets are legitimate information aggregators or loosely regulated betting platforms ripe for ethically questionable profits.
Cryptocurrencies and prediction markets intersect in other ways. Many of these platforms, including those backed or acquired by large crypto players, operate on blockchain infrastructure and allow betting on digital assets.
Trump’s push to relax regulatory oversight has tended, during his tenure, to benefit cryptocurrency markets. Although it is still early to quantify any direct effect on their personal holdings, the symbolic link between political risk and cryptoasset valuation is unmistakable for investors who see turbulence as volatility from which they can benefit.
But in Washington, politicians are now proposing restrictions against insider trading specifically on prediction platforms.
Convert the crisis into dollars
If prediction markets represent the high-risk, high-reward side of this story, the rise of Venezuelan sovereign bonds is their conventional financial counterpart.
For years, Venezuela’s government and state-owned company Petróleos de Venezuela SA (PDVSA) defaulted on billions in debt, with bonds trading at steep discounts. When Maduro was captured and the prospect of a political reset seemed real, those distressed bonds soared. Some rose nearly 20% in value as investors saw the possibility of debt restructuring or relief from U.S. sanctions.
Find out: Commercial houses surpass the main American ones in their first agreements on Venezuelan oil
Hedge funds and other institutional investors who had taken long positions in this battered debt suddenly found themselves on the verge of considerable profits. This wasn’t a bet on an election or a crypto token: it was a political event that changed credit risk expectations.
It’s the kind of speculation that made headlines in the sovereign debt crises of the 1990s and again in Greek bonds during the eurozone turmoil. But it’s rare to see such dramatic moves linked to a single operation.
The bond rally illustrates how modern markets internalize geopolitical risk: When a regime change seemed possible, investors bet that the new status quo would repair economic ties, unlock oil revenues and legitimize Venezuelan debt. The fact that this rally occurred so soon after the raid shows how sensitive markets are to political surprises.
Beyond prediction bets and debt traders, a third wave of speculation spread to energy stocks and broader markets.
American companies, particularly Chevron, which already had interests in Venezuela, saw their shares rise as investors weighed the possibility of the U.S. gaining access to Venezuela’s vast oil reserves. News that Washington might exert temporary control over Venezuelan oil sales only amplified this narrative, sending energy stock indices and broader market indices higher in the days following the raid.
The rebound was not universal: global oil prices were more moderate and even fell at times as markets evaluated oversupply scenarios. But the overall trend was clear: Geopolitical change in an oil-producing nation quickly raised expectations of higher prices for some energy companies.
This isn’t just Wall Street optimism: it reflects real strategic thinking about how a post-Maduro Venezuela could unlock tens of millions of barrels of oil and revive investment in one of the world’s largest reserves. It’s a reminder that behind seemingly chaotic headlines, markets are always trying to anticipate the economic reality of tomorrow.
Maduro’s capture was a financial event as well as a political one. It exposed how deeply intertwined markets and geopolitics are, and how much profit awaits those who can read the signals first.
This article was originally published by The Conversation
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