For weeks now, some of Wall Street’s biggest names -- Paul Tudor Jones, Steve Cohen, Leon Cooperman -- have been arguing that an Elizabeth Warren presidency would sink U.S. financial markets.

Those were just idle forecasts, though. No one said they were doing anything differently as a result. Until now. Scott Bessent, the Soros Fund Management alum who runs a $4.5 billion macro hedge fund named Key Square Capital Management, is shorting the dollar in a bid to monetize the market reaction he anticipates.

“Intelligent people can argue whether Senator Warren’s numerous programs will be good or bad for American society, but they are unequivocally negative for U.S. asset prices,” Bessent wrote in a Nov. 14 letter to investors.

It’s a risky proposition, as the 2016 election showed. Back then, many predicted a Donald Trump victory would drive down markets, only to watch them surge in the immediate aftermath of his victory. Bessent says, though, that there are many other factors that support his bet now, and that all it might take is Warren’s further rise in polls to spark a sell-off.

“A Warren presidency, or the mere threat of one, will likely hasten the exodus of foreign and domestic capital to overseas markets,” Bessent wrote.

The forces that have drawn investors to the U.S. -- superior economic growth, technological leadership and a hospitable environment for capital -- have already started to fade, he told clients. What’s more, rising equity valuations have made markets vulnerable to any shift in policies that have been favorable to companies.

Dollar put options -- which give the right to sell the currency -- are “particularly attractive” given the low level of implied volatility in foreign-exchange rates, according to the fund manager. A JPMorgan Chase & Co. gauge of currency volatility is close to a five-year low.

Warren, the senior senator from Massachusetts, is among the frontrunners in a still-large field of potential Democratic nominees. While her national polling numbers have faded since early October, they’re almost double the level from six months ago, according to RealClear Politics averages.

Pete Buttigieg has surged to the lead in Iowa, the first caucus state, with 24% support, according to the RealClear Politics average. Bernie Sanders, Warren, and Joe Biden follow with polling averages of 18.3%, 17.7% and 16.3%, respectively.

Former New York Mayor Michael Bloomberg entered the Democratic contest on Sunday. Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.

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