U.S. President Joe Biden may have seemed more coherent on Friday night's televised interview compared to the debate a week ago, but his odds of reelection did not substantially change, according to traders on crypto-based prediction market platform Polymarket.
For the contract asking who will win the presidency in November, "yes" shares for Biden were trading at 11 cents shortly after the ABC News interview with George Stephanopoulos aired, a penny lower than right before the broadcast. Each share pays out $1 (in USDC, a stablecoin, or cryptocurrency that trades at par with the dollar) if the prediction comes true, and zilch if it does not. Therefore, an 11-cent price means the market believes the incumbent has an 11% chance of winning.
A month ago, the shares were trading at 36 cents. They tanked after Biden's disastrous performance in the debate against former president and Republican candidate Donald Trump.
The presidential winner contract is Polymarket's largest, with $229 million of bets placed.
For a separate contract concerning who will win the Democratic nomination, Biden's odds climbed just one percentage point after the broadcast to 42%. This contract has $89 million staked.
A third contract asks if Biden will drop out of the race, with $12 million riding on the outcome. Odds there inched up three points, to 65%.
Four-year-old Polymarket's volume has surged this year as the U.S. election in November fuels enthusiasm for political betting. June was the platform's first month with more than $100 million in volume. Polymarket also recently won accolades for signaling early on, through the trading levels on the "Biden drops out?" contract, that the president's cognitive health was a concern long before mainstream media outlets discussed the matter seriously.
"Prediction markets have long been sought as a prime use case for blockchains," wrote Zack Pokorny, an analyst at Galaxy Digital, in a research note Friday. "Their censor/tamper resistant, transparent, and global nature makes them well suited for the task, as they allow for the unfiltered casting of opinion on any topic from anyone, anywhere."
However, on-chain prediction markets have limitations, Pokorny wrote. "They solely reflect the opinions of individuals who are active on blockchains, which, today, is a small sect of people with possibly similar beliefs. With crypto becoming an increasingly partisan political issue, and Polymarket only able to be used with crypto, it's possible that Polymarket's political markets may be skewed by the pro-crypto biases of its participants."