What Crypto Prediction Markets Tell Us About the U.S. Election

cryptonews.com:

Crypto investors have been paying exceedingly close attention to the U.S. presidential election — and with Joe Biden dramatically quitting his campaign, there’s feverish speculation as to who will take his place as the Democratic nominee.

The 2024 race marks the first time that digital assets have meaningfully been discussed by candidates, with Donald Trump and his vice presidential pick JD Vance both adopting a pro-Bitcoin stance and attracting donations worth millions in the process.

While Biden’s current vice president, Kamala Harris, appears to be gaining early ground as the favorite to face Trump in November, with endorsements from a slew of senior party officials, others have called for a more open contest.

One way of reading the tea leaves and navigating all of the drama has been by looking at the betting markets, where odds change in real time. There’s been no shortage of frenzied activity in recent weeks — once after Trump faced an assassination attempt during a stump speech, and again when Biden unexpectedly announced he was bowing out in a social media post.

The crypto-focused platform Polymarket has proven itself to be an especially popular outlet for those who fancy a flutter — with topics spanning politics, sports, and pop culture.

Here’s how it works: the cost of a bet is determined by current odds. So, if there was a 70% chance of Manchester United beating Liverpool in a soccer game, someone who supports Man U would be able to buy shares for 70 cents each. Each share would be worth $1 if their prediction was right — a 30-cent profit — and Liverpool fans get nothing.

But crucially, these shares can be sold at any time until an event is over. So if a Man U share ends up surging to 88 cents in the