Will Trump Trounce Biden? Polymarket Traders Are Betting on It.

If
traders
on
Polymarket
are
right,
and
there’s
$165
million
bet
on
the
question,
the
2024
U.S.
presidential
election
will
be
a

blowout
for
the
ages.

With
a
56%
chance
of
winning,
former
president
Donald
Trump
has
a
22-percentage-point
lead
over
incumbent
Joe
Biden,
according
to
the
crypto-based
platform’s
officially
non-American
bettors
(as
part
of
a
settlement
with
the

Commodity
Futures
Trading
Commission,
Polymarket
agreed
to
geo-block
U.S.-based
users).
Contrast
that
to
an
aggregate
of
polls
prepared
by

Nate
Silver’s
FiveThirtyEight,
which
gives
Trump
a
mere
one-point
lead.

Some
might
be
quick
to
attribute
the
huge
gap
to
the
fact
that
Polymarket
users
are,
by
definition,
crypto
users,
and
therefore
might
be
biased
toward
him.
They
might
note
that
on
PredictIt,
a
more
traditional
prediction
market
platform
settled
in
U.S.
dollars,
Trump
is

leading
50-45:
Still
a
wider
margin
than
the
polls,
but
nowhere
near
as
dramatic
as
only
Polymarket.

Trump,
after
all,
is
the

pro-crypto
candidate.
There’s
also
the
crypto
community’s
love
of
a
troll:

Trump-themed
“PoliFi”
tokens
have
a

higher
market
cap
than
their

Biden
counterparts.

On
the
other
hand,
these
traders
are
betting
on
what

will
happen,
not
what
they

want
to
happen.
So
they
are
highly
incentivized
to
research
and
make
informed
decisions,
regardless
of
their
political
preferences.
In
theory,
at
least,
these
markets
should
be
a
more
reliable
gauge
of
sentiment
than
polling,
and
perhaps
a
superior
forecasting
method
as
well.

Indeed,
Ryan
Selkis,
founder
of
crypto
research
outfit
Messari,
claimed
in
a
recent
tweet
that
the
Trump
campaign
has
been
giving
their
candidate
Polymarket
numbers
on
top
of
the

usual
polling
readout,
because
the
team
is
heavily
skeptical
of
polls
in
general.

Remember:
in
prediction
markets,
those
who
bet
on
the
correct
outcome
receive
$1
per
share,
while
those
who
bet
wrong
get
nothing,
with
share
prices
reflecting
probabilities.
A
share
trading
at
40
cents
indicates
a
40%
chance
of
success,
for
example.

Another,
more
banal
explanation
of
Trump’s
outsized
odds
on
Polymarket
is
that
traders
there
tend
to
put
a
high
premium
on
any
leading
candidate,
way
ahead
of
the
polls.

Look
at
other
recent
elections
where
there
was
a
gulf
between
Polymarket
and
the
polls.

Ahead
of
Taiwan’s
Jan.
13
election,

Polymarket
gave
the
Democratic
Progressive
Party’s
Lai
Ching-te
a
60%
to
70%
chance
of
winning,
even
though
his
polling
numbers
were
only
in
the
high
20s
to
low
40s.
Lai
won
with
40%
of
the
vote.

In
the
run-up
to

Indonesia’s
election
in
February,
Polymarket
put
Prabowo
Subianto’s
chances
of
winning
in
the
high
70s,
while
his
polling
numbers

were
in
the
high
50s.
He

won
with
55%.

There
are
a
lot
of
other
factors
at
play
in
Trump’s
high
odds
on
Polymarket.
Traders
are
heavily
discounting
independent
candidate
Robert
F.
Kennedy,
Jr.
at
around
2%
probably,
while

538’s
poll
aggregation
has
him
closer
to
9%.
Similarly,
in
Taiwan’s,
the
presence
of
a
third-party
potential
spoiler
in
the
form
of
the

newly
established
People’s
Party,
led
by
Taipei’s
former
mayor
Ko
Wen-je,
added
some
complexity
to
the
model
as
Polymarket
gave
the
TPP
lower
probability
than
its
polling
numbers.

So
is
the
Polymarket
premium
a
predictive
force
or
an
online
flex
for
Trump
fans?
We’ll
have
much
better
data
to
answer
that
question
after
the
November
ballot
result.

Trump,
ever
the
showman,
is
said
to
be
thrilled
about
taking
the
stage
against
Biden
for
the
first
Presidential
election
debate
scheduled
for
later
this
month.
So
thrilled
that
his

campaign
is
calling
for
more:
four
debates
as
opposed
to
the
two
proposed
by
the
Biden
camp.

There’s
a
growing
narrative,
however,
that
Trump
will
ghost
the
debates
entirely
if
he
doesn’t
get
his
way
about
formats
and
other
specifics.

In
an
interview
in
late
May,
Democratic
strategist
James
Carville
suggested
that
Trump
won’t
show
up
to
the
debates
if
he
doesn’t
think
doing
so
is
in
his
own
self-interest.

“I
don’t
think
Trump
will
go
to
the
debate,”
Carville
said
in
an
interview
with
neoconservaitve
commentator
Bill
Kristol.
“He
doesn’t
do
anything
that’s
not
in
his
perceived
self-interest,
and
this
is
one
of
these
things
where
he
could
hurt
—
Biden
has
a
chance
to
help
himself.”

The
market
seems
to
be
dismissing
Carville’s
prediction,
giving
the
debate
a

77%
chance
of
going
on
as
scheduled.

Meanwhile,

news
that
Trump’s
other
felony
trials
are
stuck
in
bureaucratic
limbo
means
that
the
market
is
only
pricing
in
a
14%
chance
that
he’ll
appear
before
a
court
–
and
be
convicted
again
–
prior
to
the
election
in
November.

Coinbase
is
set
to
report
quarterly
earnings
on
June
14,
and
a
closely
watched
metric
will
be
the
crypto
exchange’s
trading
volume,
a
measure
of
retail
investors’
market
participation.

Coinbase,
of
course,
isn’t
all
retail.
It
has
a
large
institutional
business,
but
the
licensed
exchange
with
reliable
banking
on-
and
off-ramps
is
a
bellwether
for
retail
trading.
Its
mobile
app’s
position
in
Apple’s
top
100
free
app
section
has
been
a

popular
indicator
of
retail’s

participation
in
the
crypto
market.

Over
at
Kalshi,
the
lone
U.S.-regulated
prediction
market
platform,

a
contract
asking
bettors
to
forecast
Coinbase’s
trading
volume
has
it
coming
in
at
$174
billion,

higher
than
the
$154
billion
Coinbase
posted
at
the
end
of
its
last
quarter
in
February.

With
the
wreckage
of
FTX
cleaned
up,
a
big
narrative
trend
has

been
the
institutionalization
of
crypto.

There’s
a
lot
to
be
said
as
to
why
this
is
a
positive
development
for
crypto,
as
endorsements
by
the
world’s
largest
fund
managers,
such
as
BlackRock
and
Fidelity,
in
the
form
of
exchange
traded
fund
(ETF)
products
are
an
indicator
that
the
asset
class
isn’t
a
fly-by-night
operation
ready
to
rug
pull
investors.

At
the
same
time,
it
can
be
argued
that
a
heavily
institutionalized
asset
class
is
antithetical
to
the
vision
of
Satoshi
Nalamoto,
who
wrote
the
bitcoin
white
paper
in
the
aftermath
of
the
2008
financial
crisis
when
these
same
institutions
torpedoed
the
global
economy.

In
the
time
since
Coinbase’s
last
earnings
report,
bitcoin
is
up
around
45%,
according
to

CoinDesk
Indices
data.
Kalshi
bettors
are
plotting
just
a
13%
increase
in
Coinbase’s
trading
volume
for
the
same
period.
Whom
are
the
spoils
of
this
bull
market
going
to?