Stable Predictions Despite Improved Performance
While President Joe Biden appeared more coherent in his Friday night interview compared to his previous debate performance, his odds of reelection showed little change. Polymarket traders continued to express skepticism about his chances.
Polymarket Trading Data
On Polymarket, a leading crypto-based prediction market, Biden’s odds in the contract predicting the November presidential winner were trading at 11 cents per share following his ABC News interview with George Stephanopoulos. This represented a slight dip from the pre-interview price of 12 cents. Each share pays out $1 in USDC (a stablecoin pegged to the dollar) if the prediction is correct, indicating an 11% chance of Biden winning.
A month earlier, these shares were trading at 36 cents, but they plummeted after Biden’s poor debate performance against former President Donald Trump. Reports suggest that Sen. Mark Warner (D-Va.) is urging fellow Democrats to consider asking Biden to withdraw from the race.
Market Insights
The presidential winner contract is Polymarket’s largest, with $229 million in bets placed. In a separate contract for the Democratic nomination, Biden’s odds increased by one percentage point to 42% after the interview, with $89 million staked. A third contract speculating whether Biden will drop out saw a three-point rise in odds to 65%, with $12 million riding on the outcome.
Polymarket’s trading volume has surged this year, driven by the upcoming U.S. election. June marked the platform’s first month exceeding $100 million in volume. The platform has been recognized for early signaling concerns about Biden’s cognitive health through the trading levels of the “Biden drops out?” contract.
Analyst Perspectives
“Prediction markets have long been considered a prime use case for blockchains,” wrote Zack Pokorny, an analyst at Galaxy Digital, in a research note. “Their censor-resistant, tamper-resistant, transparent, and global nature makes them well-suited for capturing unfiltered opinions on any topic from anyone, anywhere.”
However, Pokorny noted that on-chain prediction markets have limitations, reflecting the views of a niche group active in blockchain, which may skew towards similar beliefs. As crypto becomes an increasingly partisan issue, Polymarket’s user base may introduce a pro-crypto bias in its political markets.
