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Trump & Biden Voters Put Crypto Prediction Markets To The Test Today

Though several prediction markets appeared in the Cryptoverse recently, today they are being tested with their first US presidential elections.

On the day of the 2020 presidential elections in the US, the prediction market tables seem to have turned against the still-President Donald Trump, and now favor the potential-President Joe Biden.

There have been a few crypto/blockchain-related prediction markets developed in the past few years. The decentralized prediction market protocol Augur (REP) was launched in 2018, after raising funds in 2015. Crypto derivatives exchange FTX started operations in 2019, Omen in 2020, as well as Polymarket. Therefore, there wasn’t an opportunity to check how accurate their results are during an election in the US – until now.

As numerous traditional polls predict a Biden win, crypto-related prediction markets do so as well. Trump may have had a narrow victory after the last presidential debate when, as reported, the prediction markets and some poll voters on the crypto Twitter placed him ahead of Biden – but on the very day of the election, things look quite different. According to these markets, there is a 63% chance that Biden will win this race, compared with 38% in the case of Trump.

On Tuesday morning (UTC time), the Trump 2020 futures contract on crypto derivatives exchange FTX dropped 0.53%, standing at USD 0.377. However, there has been a c. 6.5% rise since November 1, as seen on the chart below.

Meanwhile, Biden 2020 future contract shows a change of -1.88%, and it’s standing at USD 0.626. Furthermore, it dropped c. 3% since November 1.

Also, looking at the wider picture over the last six months, we see a rise in the Biden contract, and a drop in the Trump one.

Furthermore, the betting platform Polymarket shows higher chances that Trump will lose.

Also, looking at ‘YES Trump’ and ‘NO Trump’ tokens issued by Augur, we see that the YES one went up, while the NO one dropped, per CoinGecko.com.

Augur also commented on the results they’ve seen, indicating larger support for Biden.

Updated odds and open interest for crypto-related markets that are betting on the election. Total open interest on decentralized prediction markets is still below $5 million. Odds are relatively in line with centralized exchanges and bookmakers pic.twitter.com/ho0O1TVCsA

— Larry Cermak (@lawmaster) November 3, 2020

Ethereum (ETH) co-founder Vitalik Buterin offered two potential explanations for this “puzzle”:

    9) Prediction markets are running _way_ above models.

    There are basically three theories here:

    a) models don’t understand how volatile the race is, or are missing Trump voters’ enthusiasm

    b) people are buying way too much Trump on prediction markets

    c) contested elections

    — SBF (@SBF_Alameda) November 3, 2020

    Others suggested that an “important difference is that polls weight participants equally, whereas prediction markets can be swayed by larger bidders.”

    Prepare for every possibility. pic.twitter.com/MPXJ1SB6x9

    — Jameson Lopp (@lopp) November 3, 2020

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    Slowly but surely crypto starts to take over the world, also in places where you might not have expected a use case. This ETH account uses a Chainlink oracle, further confirming $LINK as the leader in the space (it’s just the first inning though!). https://t.co/6WBFCAGbPj

    — Marc van der Chijs – new account (@marcvanderchijs) November 3, 2020

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    Every election is the “most important election” #

    — Bitcoin and Black America (@bitcoinzay)

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    The U.S. election (in crypto context) feels like SegWit2x did last cycle. A huge mess of uncertainty that keeps the… https://t.co/oF8dA9syuI

    — Ryan Selkis (@twobitidiot)

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