Polymarket Resolves U.S. Presidential Election Market

Decentralized predictions platform Polymarket has resolved its U.S. presidential election market following calls for Donald Trump from the Associated Press, Fox, and NBC.

If these organizations had not made the call, the market would have remained open until inauguration day on January 20, resolving to whoever got inaugurated.

Polymarket bettors gave Trump a 62% chance of winning the presidential race compared to Kamala Harris’ 38% as Election Day approached. The market fluctuated between candidates before favoring Trump in October, despite national polling averages showing a 1% lead for Harris before Election Day.

Trump and Cryptocurrency

This year, Donald Trump positioned himself as a pro-crypto candidate, accepting cryptocurrencies for campaign donations and proposing policies to make the U.S. a bitcoin mining "powerhouse", appoint a crypto-friendly SEC chair, and create a national strategic bitcoin reserve.

In contrast, Kamala Harris did not propose specific crypto policies. She encouraged the growth of crypto businesses while aiming to protect consumers and stated that the U.S. should become dominant in blockchain.

Betting Volume and Prediction Market Accuracy

U.S. election bets on Polymarket surpassed $3 billion before Election Day, with around $1.3 billion in volume for Trump and $822 million for Harris.

Concerns on Prediction Markets

Analysts at Kaiko noted that despite the high trading volume, Polymarket may lack liquidity for U.S. election bets, raising questions about its predictive power. Critics highlighted factors like potential market manipulation by "whales" and biases toward demographics such as men and non-U.S. traders.

Supporters claim prediction markets often reflect reality better than surveys, with studies indicating they can be more accurate due to transparency and crowd dynamics.

Post-election Trends

After the election, analysts at Animoca Brands Research suggested that Polymarket users are likely to remain engaged with the platform, noting that 75% of traders have positions on various unrelated topics.

Impact on Cryptocurrency Prices

Analysts anticipated significant price swings for cryptocurrencies as election results emerged. Bernstein analysts projected Bitcoin could rise to $80,000-$90,000 following a Trump win but could drop to $50,000 if Harris won.

Currently, Bitcoin is trading at $73,757, having recently reached all-time highs above $75,000, and has increased 7.3% in the past 24 hours, with year-to-date gains of 75%.

Meanwhile, the GMCI 30 index of top cryptocurrencies is up 9% in the past day, reaching 130.22 and showing a 31% increase in 2024.