On the eve of the 2024 US presidential election, crypto prediction markets are abuzz with high-stakes bets, positioning Donald Trump narrowly ahead of Kamala Harris.
Platforms like Polymarket and Kalshi, where election betting has soared in popularity, reflect a slight edge for Trump—57% to 43% on Polymarket and a closer 51% to 49% on Kalshi, according to a report by Reuters.
This trend in crypto markets stands in contrast to traditional polling, which still shows a close race, but without a clear leader.
As crypto dollars chase election outcomes, billions are pouring into bets fueled by both speculation and political conviction.
Proponents argue these prediction markets provide a unique barometer of sentiment, with real financial stakes adding credibility that opinion polls may lack.
Elon Musk, an outspoken supporter, remarked that “betting markets are more accurate than polls, as actual money is on the line.”
However, critics argue these markets may be biased, catering primarily to a niche crypto-savvy audience rather than reflecting the broader voter base.
Crypto platforms see massive election bet volumes
Since emerging five years ago, prediction markets like Polymarket and Kalshi have rapidly grown in popularity, particularly around major political events.
Polymarket currently leads in election-related volume, with a staggering $3.1 billion in wagers, making it one of the busiest platforms.
Kalshi, a US-regulated platform overseen by the Commodity Futures Trading Commission (CFTC), has seen $197 million in trades on its presidential outcome contract, with an additional $33.8 million on its electoral college margin contract.
These platforms set prices that reflect perceived probabilities.
For example, on Polymarket, a Trump contract costs around $0.58, while a Harris contract is priced at $0.42, with a winning contract yielding $1.
A Kalshi spokesperson noted that the platform implements trade caps—$7 million for individuals and $100 million for institutions—to prevent any single trader from having excessive influence on the market.
Despite the high volumes, some analysts question whether these platforms truly reflect voter sentiment. Michael Cahill, CEO of Douro Labs, stated,
“Your average voter isn’t spending time or money on prediction markets,” adding that the platforms are dominated by crypto-native users, many of whom favor Trump.
Future uncertain for prediction markets post-election
The surge in political betting has tested the resilience and appeal of prediction markets, though some analysts suggest the headline trading volumes may overstate active interest.
Adam McCarthy, a research analyst at digital market data provider Kaiko, pointed out that Polymarket’s $3.1 billion in trades includes inactive bets from former candidates like Nikki Haley and Robert F. Kennedy Jr.
“That $2 billion cumulative figure looks impressive, but it doesn’t entirely reflect active markets,” McCarthy explained.
However, Polymarket’s October trading volume reached $1.1 billion, marking a record-breaking month.
After the election, these platforms will face the challenge of maintaining relevance.
McCarthy noted that their success will depend on how well they adapt to non-political markets and sustain user engagement.
Regulatory challenges also loom. Polymarket, for instance, restricts US nationals from participating due to regulatory constraints, though a French national reportedly placed a substantial bet on Trump, adding an extra layer of intrigue.
Beyond politics, both Polymarket and Kalshi offer contracts on topics from Federal Reserve decisions to pop culture events, diversifying their offerings in hopes of sustaining activity after the election.
As the U.S. election unfolds, crypto prediction markets are positioned to provide unique insights into real-time sentiment—but whether they can sustain their momentum in a post-election world remains to be seen.
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