Biden Likely to Win Popular Vote, but Lose Presidency, Prediction Market Signals

This
week
in
prediction
markets:

Donald
Trump
is
one
of
only

five
U.S.
presidents
who
won
the
electoral
college,
and
thus
the
nation’s
highest
office,
despite

losing
the
popular
vote.
If
prediction
markets
are
correct,
he
will
repeat
that
feat
this
year.

On
Polymarket’s

contract
asking
who
will
win
the
popular
vote,
“yes”
shares
for
President
Joe
Biden
are
trading
at
56
cents,
indicating
the
market
sees
a
56%
chance
of
the
incumbent
prevailing.
Each
share
pays
out
$1
(in
the
USDC
stablecoin)
if
the
prediction
comes
true,
and
zero
if
it
does
not.

Trump,
meanwhile,
has
only
a
36%
chance
of
winning
the
popular
vote,
according
to
recent
prices.
Traders
have
bet
$36
million
on
this
question,
making
it
Polymarket’s
fourth-largest
market
by
volume.

The
largest
by
far,
of
course,
is
the
one
on
who

will
win
the
presidency,
with
a

record
$182
million
of
bets
placed.
Here,
Trump
is
the
clear
favorite,
with
a
57%
chance
of
winning
versus
35%
for
Biden.

Under
a
regulatory
settlement,
Polymarket
blocks
U.S.
users,
so
its
traders
are

presumably
making
predictions
from
afar.
PredictIt,
a
more
traditional
U.S.
election
betting
site
that
settles
bets
in
dollars
with
a

quasi-regulatory
blessing,
gives
Trump
a

52%
chance
of
winning
the
presidency
and
Biden
47%.
The
volume
there
is
comparatively
small,
though,
at
$15.7
million.

The

Electoral
College
was
conceived
at
the
Constitutional
Convention
of
1787.
It
is
designed
to
balance
the
influence
of
populous
and
less
populous
states,
ensure
smaller
states
have
a
voice
in
the
election,
and
prevent
a
few
large
states
from
dominating
the
outcome.
The
popular
vote,
which
carries
no
electoral
weight,
is
simply
the
proportion
of
votes
cast
for
each
candidate.

The
college
consists
of
538
electors.
A
majority
of
270
electors’
votes
is
required
to
win
the
presidency.
Each
state
has
the
same
number
of
electors
as
it
does
members
in
its
Congressional
delegation:
one
for
each
member
of
the
House
of
Representatives
(the
number
of
House
members
is
proportional
to
a
state’s
population)
plus
two
Senators.

Critics
of
this
time-honored
system
call
it

undemocratic,
while
its
defenders
argue
that
it
is
a
bulwark
protecting
the
rights
of
the
minority
against
potential

tyranny
of
the
majority.
This
much
seems
certain:
If
the
Polymarket
bettors
are
right
and
Trump
does
win
the
electoral
college
while
losing
the
popular
vote,
“Not
My
President”
rallies
will
be
back
in
vogue.

Nearly
two
weeks
after
a

report
surfaced
that
Biden
would
follow
Trump
in
accepting
cryptocurrency
donations,
the
president’s
campaign
still
hasn’t
done
so,
to
the
detriment
of
Polymarket
traders

who
bet
it
would.

To
be
fair,
the
“Biden
accepts
crypto
donations
by
Friday?”
contract,
which
launched
June
12,
had
a
tight
timeframe
of
nine
days.
The
odds
were
as
high
as
48%
early
on
but
plummeted
to
zero.
The
market
resolved
to
“no”
on
June
21,
because
the
campaign
had
made
no
such
announcement.

If
Biden
is
weighing
the
option
as
claimed,
it’s
still
possible
an
announcement
could
come
later.
That’s
one
of
the
risks
of
prediction
markets:
It’s
possible
to
make
a
bet
that’s
directionally
correct
but

still
lose
money
because
it
didn’t
come
true
within
the
agreed-upon
timeframe.

Read
more:
He
Exposed
Harvard
President’s
Plagiarism,
Then
Lost
Money
Betting
on
the
Story

Trump’s

wholehearted
embrace
of
crypto
in
May
was
followed
by
signs
the
Biden
administration
was

softening
its
hardline
stance
against
the
industry,
making
plausible
the
scenario
in
which
the
incumbent
would
accept
crypto
donations.

Was
Donald
Trump’s
son
Barron
really
a
part
of
the
team
behind
the
Solana-based
DJT
token
that

dominated
crypto
headlines
and
discourse
last
week?

A
Polymarket
contract
on
that
mystery
resolved
to
“no”
on
Sunday
but
that
decision
was
disputed.
It
resolved
again
to
“no”
and
was
disputed
a
second
time.
A
final
review
is
ongoing.
It
is
expected
to
be
closed
Tuesday.

Drama
erupted
on
Monday
in
the
Discord
forum
for
UMA,
the
third-party

oracle
service
responsible
for
refereeing
bets
on
Polymarket.
The
forum
was
packed
with
“yes”
shareholders
making
the
case
that
their
bet
was
correct.

At
issue
is
whether
“a
preponderance
of
evidence
suggests
that
Barron
Trump
was
involved
in
the
creation
of
the
Solana
token
$DJT,”
as
spelled
out
in
the
Polymarket

rules.

Neither
the
Trump
campaign
nor
Barron
have
made
any
public
statements
about
the
matter,
so
those
insisting
the
preponderance
of
the
evidence
suggests
his
involvement
are
relying
largely
on
the
word
of
Martin
“Pharma
Bro”
Shkreli,
who
served
six
years
in
prison
for
securities
fraud.

Shkreli
said
last
week
he
created
the
token
with

Barron’s
involvement
following
a
contentious
$100
million
bet
with
popular
crypto
traders.

The
relatively
new
token
made
waves
in
the
community
over
its
supposed
status
as
the
“official”
Trump
token,
buoyed
mainly
by
reports
alleging
Barron
was
part
of
the
team.
Pseudonymous
promoters
gushed
that
the
token
was
going
to

billions
of
dollars
in
market
cap,
and
prices
rocketed
thousands
of
percent
in
a
week.

But
radio
silence
from
the
Trump
family
soon
caught
on
among
followers.
DJT
prices
have
slumped
more
than
50%
to
1
cent
on
Monday
since
a
3-cent
peak
on
June
18.

With
the
review
pending,
Polymarket
traders
are
giving
the
claim
a
19%
of
being
true
as
of
U.S.
morning
hours
on
Monday,
down
from
a
peak
of
60%
when
the
market
was
created
on
June
21.
It
has
clocked
over
$693,000
in
volumes,
making
it
Polymarket’s
second-largest
market
on
a
crypto-related
question.