Prediction Markets and Polls Both Got the French Election Wrong

As a market analyst, I’ve observed that prediction markets typically surpass polls in anticipating election outcomes, yet there are instances where neither accurately forecasts the results. The French election of recent years serves as an illustrative example of this phenomenon.

One week ago, I analyzed the data from Polymarket, the popular crypto-based prediction market platform, and observed a strong likelihood of France’s right-wing National Rally party securing a majority in the National Assembly elections. The platform indicated a 97% probability, aligning with polling numbers at that time.

The prediction market traders and the polls failed to anticipate the outcome of an inconclusive parliamentary election in France, which could pose challenges for the country’s emerging crypto legislative landscape.

If Marine Le Pen’s party didn’t secure the most seats in the election, it would result in a financial gain for those Polymarket traders who placed bets predicting this outcome. However, this is not a guaranteed outcome.

When the outcome of a Polymarket contract doesn’t go as anticipated, it’s not uncommon for disagreements to arise regarding the resolution of the contract. (As a crypto investor, I have experienced this situation myself.)

As a crypto investor, I can tell you that there’s ongoing debate regarding the classification of coalitions such as Ensemble. If these alliances are not considered separate parties, then the National Rally would technically have secured the most parliamentary seats, despite losing the overall election.

As a crypto investor reading through the analysis of the French election results by bettor kipakipa, I found his perspective intriguing. He pointed out that the “Liste des nuances” encompasses not only individual political parties but also coalitions, indicating a lack of clear distinction between them in the official election outcome. This observation holds importance for us as investors since it implies that the results consider coalitions as substantial and comparable entities, just like individual parties.

As a researcher studying current market trends, I’ve observed that some significant investors on the “No” side entered their positions at around 8 to 10 cents per share. This means that if their bets pay off, they are looking at a substantial return of $1 for each share they own. Among these investors, the user named “asc” holds the largest position with 24,192 shares, which they purchased on average for 10 cents apiece.

Eye on Biden

As the elected President of the United States and the Democratic Party’s nominee, I remain committed to continuing my campaign, despite recent events. This message was shared by my team on Friday, preceding the airing of my interview with George Stephanopoulos on ABC News.

Markets were not convinced.

As a crypto investor following political markets, I observed that the President’s reelection prospects on Polymarket stayed at approximately 11% after the ABC interview, according to CoinDesk’s weekend report. However, they showed a slight improvement to around 15% by Monday. Conversely, Biden’s chances of withdrawing from the race hovered near 65% following the broadcast but dropped to roughly 57% by Monday – indicating that there was still a higher likelihood that he might choose to abandon his campaign.

As a crypto investor following political developments, I’ve noticed that while President Biden seems set on keeping his current stance, there are influential figures, including lawmakers and major donors, who are actively advocating for him to reconsider certain policies.

According to related contracts, there is a 37% probability that Biden will secure the Democratic nomination prior to the August national convention. Additionally, there is a 53% likelihood that a significant contender will declare their intent to contest Biden’s nomination at the convention.

As a researcher studying political dynamics, I can tell you that both White House insiders and Democratic National Committee (DNC) leaders are surely keeping a close eye on President Biden’s approval ratings as we approach the party convention and the official campaign kick-off.

On the American-regulated trading platform, Kalshi, where wagers on U.S. political office races aren’t permitted, there is an available market for betting on Joe Biden’s approval rating as calculated by poll aggregator 538, by the month’s end. Presently, investors predict that it will be around 36%, which falls below former president Donald Trump’s July 2020 Gallup ratings.

Ether at $2,600?

Currently ether is trading above $3,000.

I’ve been observing the crypto market closely and notice that it has been sending ambiguous messages lately. Specifically, Bitcoin, the leading cryptocurrency by market capitalization, has experienced some of its poorest performance since the 2022 FTX crisis peaked. Over the past month, according to CoinDesk Indices data, Bitcoin has plummeted by over 17%.

Ether’s price movement has been similar to Bitcoin’s, but during Asian trading hours on Monday, Ether found buying interest as sellers ran out of steam.

A big question will be how much support an ETF will give ether. Bitcoin is flat since Jan. 11, the day the ETFs started trading, while ether is down 11% in the same time period. That’s the kind of support roughly $14.7 billion in inflow can bring to an asset.