UPDATE: Polymarket Logs First $100M Month as Election Drama Heats Up

President Biden's blunders during last week's debate are the latest factor driving volume on the crypto-based prediction market.

AccessTimeIconJul 1, 2024 at 2:11 p.m. UTC
Updated Jul 2, 2024 at 8:08 p.m. UTC

This week in prediction markets:

  • Polymarket topped $100 million in volume in June, a record month in the middle of a breakout year for the crypto-based prediction market platform.
  • Biden: Will he stay or will he go?
  • Short term stability for BTC prices, but a dip below $50K is in the cards before a rally to over $75K.
  • "Stranded" astronauts unlikely to depart International Space Station via Boeing ship in late July.

Polymarket's volume soared well past $100 million in June, a record month during a breakout year for the crypto-based prediction market platform.

A total of $111 million in bets were placed on Polymarket last month, according to Dune Analytics data. It was by far the best month ever for the company, which celebrated its four-year anniversary last month and is riding high on enthusiasm for the November U.S. election.

Polymarket Dune analytics

The most recent catalyst is President Joe Biden's performance at last week's presidential debate, an unmitigated disaster.

The New York Times' editorial board, usually a source of stalwart support for a Democratic White House, is calling on him to step down. A CBS/YouGov poll says 72% of voters believe Biden does not have the cognitive health to serve as President.

Biden's odds of becoming President dropped from 33.5% pre-debate to 18% as of Monday morning U.S. time, with Trump solidifying his lead at 63%.

Polymarket Potus

Another contract, this one about the possibility of Biden dropping out of the race entirely, also rocketed off in trading volume post-debate, with "yes" shares hitting 44 cents in the hours after, up from 19 cents prior.

Each share pays out $1 (in the USDC stablecoin) if the prediction comes true and zero if not, so the 44 cent price indicated a 44% probability Biden would bow out.

A story from NBC that Biden was to spend the weekend with his family at the Mount David Presidential retreat to discuss the future of his campaign pushed the odds up to 50%.

Those odds leveled out to just over 40% as of Monday morning U.S. time as over the weekend the White House pushed back on reports, saying the trip was pre-planned.

Polymarket Biden drop out

For his part, President Biden is adamant that he will remain in the race.

“I understand the concern after the debate. I get it,” NPR quoted the President as saying to a room full of donors. “I didn’t have a great night. But I’m going to be fighting harder and going to need you with me to get it done.”

The contract has attracted serious political bettors, with the largest holders on both sides of the digital aisle largely betting on politics-themed markets.

"Therealbatman," the largest No holder, holds $2.9 million in different political contracts, consistently betting that Biden and Trump will win their respective nominations, that Biden will win the popular vote, and that Trump won't win the U.S. Presidential Election.

The only exception to Therealbatman's largely political portfolio involves a $50,000 bet that the Eigen token, the native token for the Eigenlayer protocol, won't be transferable before former Binance CEO Changpeng "CZ" Zhao, gets out of prison.

On the other side of the aisle, the largest holder of the "yes" side of the Biden drop-out contract, an anonymous user only known by his or her Ethereum wallet address, holds a $184,000 position on Biden's fate, as well as a $6,200 stake that Michelle Obama will with the Democratic nomination.

This user also has a $9,700 bet that longshot independent candidate Robert F. Kennedy Jr. will win the presidential election, which is currently trading at 2 cents.

Bitcoin price predictions

Traders on prediction markets have mixed opinions on where the price of bitcoin is going.

In the short term: stability.

A Polymarket contract gives bitcoin a 78% chance of being above $61,000 by July 5.

For reference, CoinDesk Indices data had bitcoin trading above $63,300 for most of the Monday business day in Asia, a marked recovery from its tests below $60,000 as last week began.

CoinDesk Indices' Bitcoin Trend Indicator notes that the world's largest digital asset is in a period of "significant downtrend."

Here's where things start to get complicated. The markets "tea leaves" that bettors are trying to read put us in for a correction before a rally that might test BTC's all-time high.

First, one contract on the U.S.-regulated Kalshi platform projects a 65% chance of bitcoin dipping below $50,000 by the end of 2024 and a 22% chance of it reaching below $40,000. At the same time, another contract projects a 70% chance of BTC hitting $75,000 or above by the end of the year.

Unlike Polymarket, which does business almost everywhere except the U.S., Kalshi is U.S.-only, and its bets are settled in dollars.

There are a couple of indicators that the market expects bitcoin's price to be challenged by continued dollar strength. This will certainly subside once the Federal Reserve begins to cut rates, which bettors are almost certain will happen by the last quarter.

Stranded in space

Boeing has had a tough time on Earth and its troubles seem to have extended past the confines of the planet.

The troubled aerospace giant's first space capsule is stuck at the International Space Station (ISS) after helium leaks and thruster issues have kept it docked without a definite return date. Starliner's trip was supposed to conclude on June 13.

Bettors think that the astronauts will be on the ISS for some time longer, with a Polymarket contract giving only an 11% chance of the astronauts departing on the Starliner by July 21.

The market's fine print says that the astronauts must depart on Boeing's Starliner. A rescue vessel from SpaceX or Russia won't count. Nor does it specify that the astronauts would have to safely return to Earth.

UPDATE (July 1, 19:49 UTC): Adds data about Polymarket's monthly volume record, updates headline.

Edited by Marc Hochstein.


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