The US Presidential election is only a day away. Although current Vice President Kamala Harris started on the back foot in her race against former President Donald Trump, her odds on Polymarket have narrowed significantly recently.
Harris Leads Polls, but Trump Is Bettors’ Favourite
The odds between Harris and Trump have always been narrow in various election polls. In the New York Times poll, Harris is even ahead of Trump, though the lead is very marginal—only 1 percentage point. A similar sentiment can be seen across other US election polls.
However, in the betting markets, where real money is involved, things are different. Polymarket, the largest blockchain-based betting market, keeps Trump ahead of Harris. The gap between them widened to 66.6:33.4 in favor of Trump last week but pushed Harris up over the weekend, narrowing the gap to 56:42, still in Trump’s favor.
Kamala Harris' odds continue to rise.
— Polymarket (@Polymarket) November 3, 2024
🟥 Trump • 54.8% chance
🟦 Harris • 45.1% chance
1 day to go. pic.twitter.com/9RVNdokbyH
Although Polymarket is the largest election betting market, with a volume of more than $2.8 billion, it is an offshore platform. Interestingly, political betting is also available in the US. Kalshi and Interactive Brokers-owned ForecastEx are the top two platforms, but their volumes remain significantly lower than their crypto counterpart.
The bettors on Kalshi are giving Trump a 52 percent odd against 48 percent for Harris on a market of over $185.6 million.
However, ForecastEx is a bit different as it has two separate markets for Harris’s and Trump’s victories. Only 49 percent of the ForecastEx bettors bought the contract favoring Harris’s win, while 54 percent of the bettors favored a Trump victory. The market betting on Harris’s victory has over $80.3 million in open interest, while the one for Trump’s victory has over $74.1 million.
The flip. Trump regains his lead on Kalshi. pic.twitter.com/drZWPUrgdT
— Kalshi (@Kalshi) November 4, 2024
The Legal Political Betting Market in the US
Notably, the onshore dollar-based US elections prediction markets received a setback in opening political markets, as the Commodity Futures Trading Commission (CFTC) blocked Kalshi over concerns regarding gaming and other activities that were not in the public’s interest. However, Kalshi sued the agency, and the court sided with it; even an appeals court favored the prediction market.
“Ensuring the integrity of elections and avoiding improper interference and misinformation are undoubtedly paramount public interests, and a substantiated risk of distorting the electoral process would amount to irreparable harm,” the ruling by an appeals court in favor of Kalshi stated.
“The problem is that the CFTC has given this court no concrete basis to conclude that event contracts would likely be a vehicle for such harms.”
Bitcoin Tests Another All-Time High
Meanwhile, the cryptocurrency market is also testing a new all-time high ahead of the US elections. Bitcoin, which has a market cap of $1.3 trillion, went past $73,000 and almost touched its previous all-time high. However, the token’s price dropped from that near-peak and is currently moving around $69,000.
“The relationship between election win odds and crypto prices has fluctuated significantly, partly due to multiple non-electoral factors driving markets. The strongest correlations emerged during periods of Republican momentum—both in mid-July and in recent days,” said David Lawant, Head of Research at FalconX.
However, Ether, the second-largest token on the crypto market, underperformed. The only major asset that outperformed Bitcoin was DOGE.
“DOGE was the sole major asset to outperform BTC this week, perhaps due to the Elon Musk association amid election news flow,” Lawant added.
“After six months of directionless trading, markets appear eager to move past election uncertainty towards firmer ground,” he continued. “Trading volumes, typically a reliable confirmation of crypto trends, are starting to show signs of life and have jumped 30–40% above their three-month average in the past couple of days.”
