Accountant wins $128,000 betting against DOGE spending cuts

Alan Cole, an international tax accountant, has secured a $128,000 profit on Kalshi (a prediction market platform) by betting against the prediction that the Department of Government Efficiency (DOGE) would reduce U.S. federal spending. The wager was settled after the U.S. government released its 2025 year-end spending report on February 20, which showed spending increases compared to 2024. According to a story regarding the winnings in The Wall Street Journal, Cole wagered his life savings to take the counter-bet that the U.S. federal budget would not instantly shrink.

The financial breakdown of Cole’s position on the platform includes:

• Amount wagered: Over $342,000
• Total payout received: $470,300
• Net profit: $128,000

The trade took place within a Kalshi prediction market that had grown to a total size of $12 million. Cole slowly amassed 3% of this market, taking the counter-position to Elon Musk fans who eagerly bid up a contract predicting that the Department of Government Efficiency could effectively reduce federal spending in a year.

While other market participants expressed optimism about rapid cuts, Cole’s professional background made him highly skeptical. He asserted that the U.S. federal budget would not instantly shrink, arguing that federal spending could not be quickly reduced. Even if DOGE eliminated some federal contracts and laid off workers, Cole maintained that plenty of remaining obligations and the skyrocketing federal debt would prevent a rapid decline in overall spending.

This outcome highlights the shifting utility of prediction platforms. Beyond mere speculation, the trade serves as a practical case study in how individuals and institutions can use prediction markets as a financial hedging strategy against government policy outcomes. By trading contracts tied directly to legislative and budgetary realities, market participants can manage risks associated with macroeconomic policy shifts.

Why it matters

This event demonstrates how prediction markets are evolving from speculative tools into viable instruments for financial hedging against government policy outcomes.