Crypto Prediction Markets Back Trump Against Harris as Election Approaches
In the digital world of cryptocurrency speculation, as the U.S. presidential elections approach, prediction markets favor Donald Trump over Kamala Harris. Crypto-based platforms like Polymarket and Kalshi are witnessing billions of dollars in trading volume as participants place bets on the election outcome.
As of Monday, Trump leads with approximately 57%-43% on Polymarket and a narrower margin of 51%-49% on Kalshi. This contrasts with public opinion polls indicating a competitive race.
Polymarket, the more active of these platforms, has seen a significant trading volume of $3.1 billion in presidential election bets. Kalshi, operating under the U.S. Commodity Futures Trading Commission (CFTC) regulation, recorded about $197 million in trading for its election outcome contract. The second-largest bet on the platform, the election commission margin, attracted $33.8 million.
The reliability of these markets as indicators of election results is debatable. Some argue that the odds are distorted by large bets and reflect the sentiments of a crypto-centric demographic rather than the general population. Elon Musk has previously acknowledged that betting markets may be more accurate than polls due to financial risks involved. Michael Cahill, CEO of Douro Labs, notes that the average voter is typically absent from these markets, which are dominated by crypto enthusiasts supporting Trump.
On Polymarket, the price of a contract betting on Trump’s victory is around $0.58, while the odds for Harris to win hover at approximately $0.42. The contract pays the holder $1 if their chosen candidate wins. Kalshi has implemented measures to ensure the legitimacy of its traders, establishing a trading limit of $7 million for individuals and $100 million for eligible contract participants.
A crypto exchange, dYdX, offers leveraged betting on the outcome of the election, providing a more complex betting form tied to Polymarket’s odds through perpetual contracts.
Despite the massive trading volume on Polymarket, Adam McCarthy, a research analyst at digital market data provider Kaiko, indicates that the $3.1 billion figure includes inactive bets on former candidates and does not fully represent active markets. McCarthy explains that roughly $1.97 billion of this volume comes from active bets on Trump or Harris. Additionally, Polymarket has identified a French citizen as a significant bettor on Trump due to regulatory restrictions preventing U.S. citizens from trading on the platform.
The excitement around betting on this U.S. election has surpassed previous activities on these new platforms, which offer potential bets on a wide range of topics from Federal Reserve meeting outcomes to popular cultural events. According to Dune Analytics data, Polymarket's total volume hit a record $1.1 billion in October, with approximately $200,000 traded so far this month.