U.S. President Joe Biden and former President Donald Trump held their first televised debate last week for the upcoming November elections, and Biden took a significant hit. Although Biden appeared more coherent in a televised interview on Friday night compared to his debate with Trump, traders on the crypto-based prediction market platform Polymarket believe his chances of re-election remained largely unchanged.
Biden’s Winning Chance Seen at 14%
Immediately after Biden’s interview with ABC News‘ George Stephanopoulos aired, the “yes” shares for Biden in the contract for who will win the presidency in November were trading at $0.11, just $0.01 below the level before the interview. Each share pays $1 if the prediction is correct and nothing if it is wrong. Therefore, a price of $0.14 indicates that the market sees the incumbent president’s chance of winning at 14%.
A month ago, shares were trading at $0.36, but they plummeted after Biden’s disastrous performance in the debate against former President and Republican candidate Trump the previous week. According to the Washington Post, following the debate, Democratic Senator Mark Warner and other Democrats began urging the president to withdraw from the race.
The presidential winner contract is currently Polymarket’s largest contract, with $229 million bet on it. For a separate contract on who will win the Democratic nomination, Biden’s chances increased by just one point to 42% after the interview. This contract has $89 million invested in it. A third contract asking whether Biden will withdraw from the presidential race has $12 million invested. The odds in this contract rose by three points to 65%.
Presidential Race Boosts Polymarket’s Trading Volume
Polymarket, a four-year-old platform, has seen its trading volume significantly increase this year as people’s passion for political betting grows ahead of the U.S. presidential election in November. June marked the platform’s first major month, reaching over $100 million in trading volume. Polymarket also received praise for early signaling concerns about the president’s cognitive health through trading levels in the “Will Biden withdraw from the race?” contract, long before mainstream media took the issue seriously.
Galaxy Digital analyst Zack Pokorny noted in a research report, “Prediction markets, long seen as a primary use case for blockchains, are well-suited for this task due to their censorship/tamper-resistant, transparent, and global nature, allowing anyone to express uncensored opinions on any topic from anywhere.”
“However, on-chain prediction markets have some limitations,” Pokorny added. “They only reflect the views of individuals active on blockchains, which today is likely a small segment with similar beliefs. As crypto increasingly becomes a partisan political issue and Polymarket can only be used with crypto, it’s possible that Polymarket’s political markets are skewed by the pro-crypto biases of its participants.”
