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US Election Roller Coaster Floods Crypto Betting Sites With Bets
(Bloomberg) — The turbulent U.S. presidential election has flooded crypto betting site Polymarket with so many bets that it is upgrading the platform to handle growing volumes of incoming funds.
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Polymarket will begin integrating Miami-based MoonPay’s software, which will allow users to pay for their bets via bank transfer and credit card, the two companies announced Wednesday. Bettors currently buy the USDC stablecoin on a cryptocurrency exchange and transfer it to Polymarket before placing bets.
The betting frenzy is fueled by an election in which one candidate, Donald Trump, has already survived an assassination attempt, shortly before incumbent Joe Biden withdrew from the race after a revolt within the Democratic Party. Betting volumes on Polymarket have hit a record $260 million so far in July, more than a third of this year’s total, according to data from Dune Analytics.
“We’ve seen incredible product-market fit recently, as we’re going through what’s probably the most unpredictable and volatile election season in the United States in living memory,” David Rosenberg, Polymarket’s vice president of strategy, said in an interview.
More than $366 million has been wagered so far this year on the winner of the November election, in which Trump will likely face Vice President Kamala Harris.
Polymarket is not available in the United States. Its rapid growth comes as the Commodity Futures Trading Commission considers a proposed ban on trading derivatives that bet on political elections and sports games, a category known as event-driven contracts.
Polymarket was fined by the CFTC in early 2022 after the regulator accused it of offering illegal trading services. As part of the settlement, the company promised to cease its services in the United States while continuing to operate abroad. J. Christopher Giancarlo, a former CFTC chairman under the previous Trump administration, joined Polymarket’s board a few months later.
A $1.4 million bet on Trump
The most popular contract on New York-based Polymarket currently indicates a 61% chance that Trump will beat Harris. Its odds rose somewhat after Biden’s disastrous performance in the late June debate, then spiked after the July 13 shooting at a campaign rally in Butler, Pennsylvania. Volumes also trace the arc of the election campaign, which surged after Trump’s speech at the Republican National Convention and Biden’s historic decision to withdraw from the race.
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The biggest bet on the winner of the election so far is a wager worth about $1.4 million, posted Wednesday, that Trump will become president again.
Polymarket allows users to bet on the outcome of a wide range of events, from politics to sports. Bettors buy what Polymarket calls “yes” or “no” stocks on a particular event, and the buying and selling of these instruments then determines the odds of the outcome at any given time.
The deal with MoonPay could also allow Polymarket to accept crypto assets other than USDC for betting, Rosenberg said. For users who are unfamiliar with digital assets, the goal is to make payments so seamless that they don’t even know crypto is the underlying transaction medium, he added.
“You don’t have to be a crypto expert to get something out of it,” he said.
Other popular betting events included the debuts of U.S. exchange-traded funds tied to Bitcoin and Ether this year and the brief leadership crisis at Sam Altman’s OpenAI last November, according to Rosenberg.
Polymarket raised $70 million in two funding rounds, Bloomberg News reported in May, with its latest share sale led by Peter Thiel’s venture capital firm Founders Fund.
(Updated number in fifth paragraph.)
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