In the final weeks of the presidential election, some polls and prediction markets indicate that Donald Trump could return to office in January 2025. The former president overtook Vice President Kamala Harris for the first time since August in The Economist’s statistical model. The US presidential election and some other media outlets and political forecasters are predicting the same outcome.
Prediction markets like Polymarket and PredictIt also show Trump won the election, but the margin is much larger than some polls. As of Wednesday, Polymarket users indicated Mr. Trump had a nearly 64% chance of winning the election, while Ms. Harris had just 36%. According to PredictIt, Trump has a 59% chance of leading, to Harris’ 43%.
But the important thing to remember about Polymarket is that it is a cryptocurrency-based prediction market, and Americans are not even allowed to trade on the website. As a result, Polymarket is conducting tests to determine whether the platform’s primary users are based outside the United States, people familiar with the matter told Bloomberg.
This could be an important factor in understanding why Trump appears to have a wide lead over Harris, especially since only a small number of polymarket users appear to be swaying the election odds. There is. Starting earlier this month, four Polymarket accounts began placing millions of dollars worth of bets that Trump would win the election.
As of Wednesday, Polymarket users Fredi9999, Theo4, PrincessCaro and Michie had bet a combined $30 million on Trump winning the 2024 presidential election. Another Polymarket user, zxgngl, has been on a buying spree in recent days, betting more than $5 million worth of cryptocurrencies on Trump taking back the Oval Office. With more than $35 million in bets rapidly pouring into the presidential election market, it’s no wonder Trump appears to have the upper hand.
Alex Marinier, a venture capitalist who originally invested in Polymarket’s seed round in 2020, told Fortune that it’s entirely possible that “some big whales are making big bets that move the market.” spoke.
“Either they are extremely confident that Mr. Trump will win, or they are explicitly trying to influence market views in favor of their candidate to increase Mr. Trump’s chances of winning. raft,” Marinier said. “But if the market believes this whale bettor is actually too optimistic about the candidate, market forces should bring the market odds back to the ‘correct’ market level.”
Are prediction markets accurate?
Some political experts and gambling experts say prediction markets are the most accurate way to predict election outcomes because people are betting real money on certain outcomes. The way prediction markets work is that traders buy stocks depending on which outcome they think is more likely. Stock prices or “odds” rise and fall based on demand, so if the event occurs as predicted by the trader, the contract or “stake” increases to $1 and pays out, or $0 if it doesn’t. falls to the dollar.
“Political betting sites are the best at predicting the wisdom of the crowd,” Northwestern University data scientist Thomas Miller told Fortune’s Sean Tully. Miller is known for his accurate predictions for the 2020 election, and his methodology is based in part on prediction market research.
But other experts are less convinced, especially since Polymarket only allows users to bet with cryptocurrencies and US voters are not even allowed to participate.
“I couldn’t agree more with that theory,” George Kailas, CEO of stock market intelligence tool Prospero.ai, told Fortune. “People are spending money around what they want to happen, rather than a strong underlying logic or reason.”
Furthermore, given that Polymarket is crypto-based and Trump is a crypto supporter, “this shows that Trump supporters are more willing to bet on him than on ‘wisdom.’ Yes,” Kailash added.
Indeed, pollster and Ipsos president of public relations Cliff Young said Fortune’s betting market is “about as good as the polls.” While the “2024 Presidential Election Winner” market shows Mr. Trump with a significant advantage over Ms. Harris, the “2024 Popular Vote Winner” market shows that Ms. Harris leads. It has been. Young said it may be because President Trump appears to be strong in battleground states.
“Harris leads in national elections that have trended Democratic over the past few decades, but battleground states will decide the election,” Young said.
