Biden’s Withdrawal Shakes Up Polymarket
President Joe Biden has announced that he will not seek re-election, a decision that has sent ripples through the political and economic landscape. One of the key affected areas is the Polymarket prediction market, where users have surged to invest in election-related contracts. This single announcement led to a record $28 million in daily volume on Polymarket, which is more than double the average daily volume of $4-5 million just a month ago. The number of active accounts has also doubled, now reaching nearly 6,000 daily from around 3,000 previously.
As a result of Biden’s decision, the market for the U.S. presidential election winner has seen a substantial investment, with $319 million now at stake. The market for the Democratic nominee is another hotspot, attracting over $212 million, largely favoring Vice President Kamala Harris. Her chances of becoming the next president have surged by 18% to 27% on Polymarket, with her odds of acquiring the Democratic nomination standing at an impressive 81%.
Economic and Market Repercussions
The news of Biden stepping down has introduced a level of unpredictability, which is now being mirrored in economic and market behaviors. Some investors are cautious, predicting that this newfound uncertainty could exert downward pressure on the S&P 500. This potential market volatility is considered significant given the large shifts in political betting markets.
Bitcoin and other cryptocurrencies have also reacted, with Bitcoin prices sliding by 1.5% on Monday. This decline in cryptocurrency values is attributed to the fading Trump trade, which had been greatly favorable for digital assets. On the other side of the political spectrum, Kamala Harris is expected to continue with Biden’s policies, including a focus on climate change and enhancing scrutiny of anticompetitive practices by big corporations.
Despite Donald Trump’s continued strong presence in the political betting market, his odds of winning the presidency have slightly dipped to 65% from 66% following Biden’s withdrawal. This marginal change still reflects a strong position, though it underscores the impact that Biden’s decision has had across prediction platforms.
Interestingly, prediction markets like Polymarket and PredictIt are increasingly seen as reliable indicators of political outcomes. Research points out that these markets often serve as more accurate predictors compared to traditional polling methods. This lends substantial weight to the present betting trends, adding another dimension of intrigue to the unfolding political drama.