With just days before the U.S. presidential election, activity on decentralized prediction markets is picking up, focusing on former President Donald Trump’s outcomes. The percentage of Trump ‘Yes’ shares controlled by a few large investors (known in crypto as ‘crypto whales’) is above 50%. EU activists are already worrying about how accurate political odds are in the crypto world.
According to pseudonymous political bettor Domer, five major entities dominate Trump’s shares in the leading decentralized prediction market. A concentration of investment here could generate profits in the tens of millions for these whales, as they’ve put big stakes on Trump’s prospects in the November 5 election.
The ownership of Trump and Kamala shares on Polymarket have REALLY different make-ups, strangely reminiscent of their economic policies.
Thanks to @primo_data and Polymarketanalytics for the charts.
Trump Yes shares are very highly concentrated. 5 fat cat accounts own 50% of… pic.twitter.com/cIOTkasbGF
— Domer (@Domahhhh) October 31, 2024
Share distribution comes to mind for Domer, who pointed to the sharp difference among how many of Vice President Kamala Harris’ “Yes” votes are held by her top five backers, which amount to 18%, including the single largest backer controlling just 4.4%. By contrast, Trump’s biggest shareholder has 29.1 percent of the shares.
Such concentrated betting activity is attracting both political and crypto investors. It has piqued their interest because the election’s outcome could have profound implications for the regulatory environment for the cryptocurrency industry over the next four years. Four of the top six Trump bettors, including ‘signal’ and ‘Fredi9999,’ appear to be affiliated with at least one account orchestrated by one of the biggest bettors, who is also quite confident in Trump’s prospects.
Even with recent market swings, Trump remains at the top of the decentralized betting markets, where Polymarket puts his odds at 56.9 percent to win, and Harris sits at 43 percent. While Kalshi’s margin is broader, with 54% of bettors backing Trump and 46% of Harris, one other betting platform exhibits a narrower distribution: by 71 to 29 percent among bettors, Trump was backed, and Harris was supported by 29 percent.
This more ambiguous picture comes from traditional polling data. Harris leads Trump in The New York Times‘ national polling average by 48 percent to 49 percent. This discrepancy has given rise to debates on whether decentralized prediction markets are more reliable than traditional polling.
In a particularly interesting twist, billionaire Elon Musk has suggested that prediction markets may be more accurate than conventional polling because, in effectively putting their money where their mouth is, investors have already wagered with their capital.
After the odds began to shift in Trump’s favor in September, they’ve been trending noticeably toward Trump in recent weeks. As of mid-October, Trump was leading the Bitcoin betting market by over 10 points, which prompted some analysts to label the recent pullback or ‘Trump pump’ as such.
On October 29, Bitcoin rose to a strong level longer than March 2024, hitting $73,600, about $200 away from its all-time high. Despite that, some market observers caution that the current rally may be only a ‘Trump hedge’ and needs the underlying macroeconomic conditions for an all-time high post-election.
With the election date fast approaching, the intersection of politics and cryptocurrency remains the favorite topic for investors keen to understand what the result will mean for the two sectors.
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