Polymarket Projects a GOP House, Clinching Trump Trifecta

Polymarket,
the
crypto-based
prediction
market
whose
rise
this
year
was

vindicated
by
the
presidential
election
results,
is
now
signaling
that
the
Republicans
will
almost
certainly
retain
control
of
the
House
of
Representatives.

As
of
Wednesday
afternoon
in
New
York,
“Democratic”
shares
for
Polymarket’s
“House
control
after
2024
election?”
contract
were
trading
at
1
cent,
indicating
traders
see
only
a
1%
chance
of
the
party
taking
back
the
chamber.
Each
share
pays
out
$1
(in
USDC,
a
stablecoin,
or
cryptocurrency
that
usually
trades
one-for-one
with
dollars)
if
the
prediction
comes
true,
and
zilch
if
not.

The
GOP’s
odds
of
winning
the
House,
accordingly,
were
at
99%.

While
news
organizations
predicted
that
Democrats
would
hold
the
House
in
the
early
hours
of
the
election
on
Nov.
5,
by
Wednesday
afternoon

they
began
following
Polymarket
in
saying
those
chances
were
“fading.”

Just
24
hours
earlier,
the
market
was
giving
the
Democrats
a
slightly
better
than
even
chance
of
prevailing
in
the
lower
house
of
Congress.

According
to
the
Associated
Press,
control
of
the
House
was

still
undecided
as
of
2
p.m.
ET.
But
the
Republicans
have
won
at
least
52
Senate
seats,
ensuring
them
a
majority
in
the
upper
chamber.

If
the
current
odds
are
correct,
then
the
Republicans,
led
by
president-elect
Donald
Trump,
will
have
hit
the
trifecta,
controlling
the
White
House
and
both
houses
of
Congress.

That,
in
turn,
would
ease
the
path
for
comprehensive
crypto
legislation
in
the
next
Congress,
something
the
industry
has
been
pushing
for,
complaining
that
existing
laws
do
not
clearly
address
how
digital
assets
should
be
regulated.

By
contrast,
Gary
Gensler,
the
lame-duck
chairman
of
the
Securities
and
Exchange
Commission
under
outgoing
President
Joseph
Biden,
has
insisted
that
existing
rules
are
sufficient
to
supervise
the
industry.

To
be
sure,
Polymarlet’s
House
contract
has
relatively
small
volume
($2
million)
compared
to
the
now-resolved
presidential
market,
which
saw
billions
in
trading.

In
prediction
markets,
traders
bet
on
the
verifiable
outcomes
of
real-world
events
within
defined
time
frames.
In
recent
weeks,
the
higher
odds
Polymarket
gave
Trump
of
winning
the
presidency
compared
to
polls
led
to
speculation
in
the
mainstream
media
that
someone
was

manipulating
the
market
to
overstate
his
chances.

Proponents
have
long
argued
that
these
markets
can
be
a
superior
forecasting
method
compared
to
polls
or
punditry
because
the
participants
are
putting
money
on
the
line
and
therefore
are
strongly
incentivized
to
do
thorough
research
and
bet
on
what
they
believe
will
happen,
not
what
others
want
to
hear.

Trump’s
resounding
victory,
despite
polls
that
showed
a
toss-up,
supports
that
case.

“Markets
are
better
than
models.
Almost
axiomatically,
because
any
model
that
has
[a]
useful
signal
is
already
incorporated
into
market
prices,”
said
Flip
Pidot,
CEO
and
co-founder
of
American
Civics
Exchange,
an
over-the-counter
dealer
in
political
contracts.

“Markets
aren’t
perfect,
but
they’re
the
best
mechanism
we’ve
got,
for
discounting
not
only
future
cash
flows
but
future
uncertainties,”
Pidot
said.
“So
markets
generally
benefit
from
models
to
the
extent
they
can
incorporate
them
in
their
pricing.
But
if
you’re
looking
for
the
best
fair
odds,
look
at
market
prices,
not
legacy
forecasters.”