As an analyst, I’ve been closely following the Polymarket election market for the upcoming US general election. Contrary to the polling data that suggests a clear front runner between former President Trump and incumbent President Joe Biden, this market is delivering a split decision on their chances of winning. This intriguing disparity highlights the complexity and nuance of predicting electoral outcomes.

As an analyst, I would rephrase this as follows: The current market price for both Trump and Biden shares is at 45 cents each. This equates to a 45% chance of winning for each candidate, according to the market. If my prediction aligns with the eventual outcome, I will receive a $1 payout for that share. However, if my prediction is incorrect, there will be no return on investment.

In the crypto prediction market, a large sum of money – approximately $124.43 million – has been staked by traders on the outcome of the upcoming election. Among this amount, around $28.25 million represents bets placed on or against the two main candidates. The wife of former President Barack Obama, Michelle Obama, is currently valued at a 5% likelihood, while independent candidate Robert F. Kennedy Jr. stands at a 3%.

As a market analyst, I have observed that Trump seems to be losing ground based on recent data. The emergence of longshot third-party candidates appears to have benefited Biden instead. Over the past month, Trump has experienced a decline of one point in the polls, while Biden has gained three points.

As a researcher studying prediction markets, I’ve noticed an intriguing shift in trends. Previously, these markets had closely followed national polls, providing valuable insights into the relative strengths of the Trump and Biden campaigns. However, more recently, they have begun to diverge from these polls, granting the Trump campaign a perceived edge over Biden.

According to the averages of polls compiled by 538, Trump holds a slim lead of 0.7 percentage points over Biden. Meanwhile, Kennedy garners 10% of the votes in the same polling data. In contrast, 270toWin estimates Trump’s advantage to be slightly larger at 0.9 percentage points.

Concurrently, there exists a significant variance in the polling data presented to Trump. Some surveys, such as those carried out by Harris in conjunction with Harvard, indicate a seven-point advantage for Trump (in a five-way contest including Biden, RFK, and two longshot candidates). A late April survey conducted by CNN displays a nine-point lead for Trump. In contrast, TIPP Insights shows a slight edge for Biden. YouGov’s poll for The Economist aligns with Polymarket’s assessment of a dead heat.

As a crypto investor, I’ve observed an intriguing development in recent weeks – a substantial increase in investments into the Biden election contract. This influx of funds has significantly enhanced the chances of the incumbent, making his odds more favorable.

As an analyst looking back at the data from several months ago when the presidential contract was just starting to take shape, I noticed a significant disparity between the polling numbers and the betting trends. At that stage, Trump held a substantial lead with 53% of the votes compared to Biden’s 33%, which was quite contrasting to the national polling figures. Simultaneously, more funds were being wagered on Trump than Biden, with a total of $6.46 million bet against him and $4.6 million bet for him.

Perhaps the numbers will even out as the pool of participants becomes more inclusive.

On PredictIt, a widely-used U.S. platform for making elections-related wagers, Biden currently holds a 50% probability of winning, compared to Trump’s 48%. Unlike Polymarket, this platform has not been banned in the U.S., despite the Commodity Futures Trading Commission recently proposing a ban on contracts related to elections.

As a researcher examining the data, I’ve noticed that Polymarket’s transaction volume in the presidential election exceeds PredictIt’s significantly, with Polymarket handling markets worth nine figures. In contrast, PredictIt has a total of 13.9 million shares, which equates to a relatively smaller dollar volume of under $14 million.

Balance of power

On November 5, not only will citizens cast their ballots for the next President, but they will also have the opportunity to choose their representatives in Congress. A total of 435 House positions are open for election, and the contest for 33 Senate seats adds to the significance of this important day in American democracy.

As a researcher studying the U.S. political system, I’ve found that while the official description characterizes it as bicameral with two legislative bodies, the Senate and the House of Representatives, the real power dynamics are more intricate. In practice, the balance of power involves three distinct entities: the legislative branch, the president, and the interplay between them.

As an analyst, I can assert that the distribution of power plays a crucial role in this situation. According to wagers placed on Polymarket, there is a strong belief among bettors that the Republicans will secure control of the Senate based on two distinct contracts posing the same query yielding comparable results.

According to the data from the first betting market, where participants are wagering on the balance of power in the Senate after the 2024 election, collectively, they have placed around 77% of their bets on the Republican Party winning control.

The terms of a comparable agreement focus on Senate control post-election, granting Democrats approximately a 27% likelihood and Republicans around a 73% probability, with a slight lean towards the Republican chances.

The two Senate contracts, which currently don’t hold substantial funds, may provide clearer insights once they accumulate more wealth in their respective treasuries. Meanwhile, with polls indicating close races and the potential for voters to support candidates from different parties, it will be intriguing to observe how prediction markets adapt as election day approaches.