According to the current Polymarket election odds, Donald Trump holds a 65.5% chance of winning the election.
Separate investigations by Chaos Labs and Inca Digital have allegedly found that an estimated 30% of the 2024 United States Presidential election activity on Polymarket is the result of wash trading. This market manipulation tactic aims to artificially inflate trading volume. According to a report from Fortune, both firms claim that the actual transaction volume on the prediction platform was only $1.75 billion. This contrasts with the $2.7 billion reported by Polymarket.
Analysts from Chaos Labs attribute this discrepancy in transaction volume to Polymarket counting shares for candidates in whole dollar amounts. This is in spite individual shares on Polymarket trading well under $1.
Data from Dune also revealed that the total open interest for the 2024 presidential election on the platform was just over $150 million. This open interest figure is a different metric than the billions in transaction volume because of traders selling their positions to other participants on the platform.
Welcoming an influx of crypto and cash, online prediction markets have steamrolled into political forecasting. Kalshi is among the many platforms benefitting from the craze. Kalshi co-founder Luana Lopes Lara boasted that bettors have wagered $100 million on the contest between Kamala Harris and Trump recently. CEO Tarek Mansour, other co-founder of Kalshi also hyped a company milestone on LinkedIn. On App Store’s most popular downloads of Apple, the platform surpassed Instagram.
Betting on political races hasn’t shown to have predictive validity. Regulators will closely watch the money flooding into election markets as November 5 nears. Professor of financial accounting at Cambridge University, Alan Jagolinzer says there is definite risk of fallout. He references Polymarket. It is the largest platform in the space and is headquartered in Panama. It exclusively uses the cryptocurrency US Dollar Stablecoin (USDC).
