Trump's "TACO Trading" Shakes the Market: Polymarket Greenland Collapse Bet, Funds Significantly Withdraw

January 22 News, as Trump suddenly withdrew his tariff plans against the EU and signaled a thaw regarding the Greenland issue, a batch of traders on the prediction market Polymarket suffered heavy losses. Previously, bets on “Will Trump acquire Greenland before 2027” quickly reversed, with the probability of “Yes” dropping to about 11%, and a significant amount of funds being withdrawn.

This trend once again confirms the so-called “TACO trading” logic. The concept was proposed by Robert Armstrong in 2025 to describe Trump’s usual strategy: first issuing extreme threats to trigger market panic, then retracting or softening the stance to trigger a rebound in asset prices. The “D-Day” tariff shock in April 2025 is a typical example, and the operation around European tariffs and Greenland issues in January 2026 repeated this pattern.

Earlier this week, Trump announced plans to impose a 10% tariff on eight European countries, potentially raising it to 25% before June, while linking this arrangement to negotiations over Greenland. Subsequently, after meeting NATO Secretary General Mark Rutte, his attitude shifted sharply, stating that a framework consensus had been reached on Arctic and Greenland-related issues, and canceling the tariffs originally scheduled to take effect on February 1. This statement directly shattered previous political expectations.

On Polymarket, the “Yes” position quickly shrank. On-chain data shows that the account GamblingRuinsLives invested about $105,000 in this option, leaving only about $56,000; another trader, opticnrvs, suffered even heavier losses, withdrawing over $90,000. Currently, major holders of the “Yes” option are generally facing unrealized losses of 40% to 50%, while traders betting “No” have gained slight profits.

This volatility highlights the high sensitivity of political narratives in prediction markets. Once policy threats are withdrawn or softened, capital pricing quickly reconfigures, and speculative positions are easily “reversed.” Meanwhile, “TACO trading” brings short-term benefits to risk assets. As market risk appetite recovers, the overall market cap of cryptocurrencies has slightly increased in the past 24 hours, with mainstream coins generally recording moderate gains.

In the macro environment of 2026, the linkage between Trump’s policy rhythm, prediction markets, and crypto markets is becoming more closely intertwined, and short-term signals are increasingly directly influencing capital flows.