The upcoming November elections are expected to have a significant impact on cryptocurrency, particularly through the anticipated rise of PolitFi. However, so far, this expectation has not materialized. The fluctuations caused by changes in candidates’ meme coin win rates have kept the market in a state of uncertainty. As this situation persists, crypto prediction platforms have started to seem more appealing. Meanwhile, the U.S. CFTC has begun to take action in this regard.
Cryptocurrency and U.S. Elections
Meme coins themed around Biden, Trump, and JFK garnered much more interest a few months ago. Following Trump’s recent attack, tokens focused on him saw significant gains. However, this interest has begun to wane, compounded by a general apathy in cryptocurrency markets and the emergence of prediction markets.
Individuals looking to invest in cryptocurrency around the U.S. elections have two options. The first is to await the success of their favored candidates through PolitFi tokens. The second option involves more straightforward betting on candidates’ fates via prediction markets. With concerns over fraudulent tokens and the performance of PolitFi altcoins linked to BTC, the latter option appears more logical to investors.
While awaiting the U.S. elections under the shadow of PolitFi, millions of dollars are being tied to election predictions, overshadowed by “biased polls.”
CFTC Takes Action
The U.S. CFTC is dissatisfied with the current situation. Although the Commodity Futures Trading Commission lost its first lawsuit against the prediction market Kalshi, it filed a new request in court yesterday. As the CFTC continues its appeals process, it argues that the ruling should be suspended. The request notes that Kalshi could exploit the legal complexities of the current election season, potentially leading to injustices.
“Kalshi’s contracts involve betting on the outcomes of elections, thus fitting into the typical definition of ‘gambling.’” This is indeed gambling and is illegal in many countries. Considering Trump’s reported 7-point lead over Harris in these protocols, investors are far removed from reality. The CFTC’s request includes these additional details.
“An election is not a game. It is not staged for entertainment or sports. Unlike the outcome of a game, the result of an election has massive external and economic consequences.”
Kalshi acknowledges the potential for abuse but cites examples of similar operations currently operating illegally. The CFTC advocates for prevention due to public harm. The final section of the request states:
“A pharmacy cannot distribute cocaine just because it is sold on the black market. The Commission has determined that allowing election gambling in U.S. futures markets poses a serious threat to election integrity. The existence of another platform offering this without CFTC oversight does not justify the proliferation of election gambling.”
