FTX-traded futures prices and prediction markets point to Joe Biden, the Democratic Party’s nominee, winning the U.S. presidential election on November 3.
Updated odds and open interest for crypto-related markets that are betting on the election. Total open interest on decentralized prediction markets is still below $5 million. Odds are relatively in line with centralized exchanges and bookmakers pic.twitter.com/ho0O1TVCsA
— Larry Cermak (@lawmaster) November 3, 2020
According to ElectionBettingOdds.com, Biden’s odds of winning are estimated at 64% versus 36% for Trump. The service aggregates data on bets across FTX’s crypto-derivatives exchange, the centralized prediction market PredictIt, and bookmakers Betfair and Smarkets.
Source: ElectionBettingOdds.com.
Analyses have shown that prediction markets forecast election outcomes more accurately than public opinion polls. For example, four years ago prediction platforms erred less than polling models. In the 2016 presidential race, Hillary Clinton had a larger lead but unexpectedly lost to Donald Trump.
The Block analyst Larry Cermak noted a widening gap between what the statistical models predict and what the betting odds reflect. Compared with 2016, the gap has widened fourfold—from about 5% to 20%.
What’s the most interesting to me this year is the massive gap between what the statistical models predict and what the betting odds are. In the 2016 election, that gap was only around 5% while now it’s more than 20%. Shows how much people don’t trust the polling accuracy
— Larry Cermak (@lawmaster) November 3, 2020
Decentralized prediction markets have emerged relatively recently and have yet to boast significant open interest (currently under $5 million), but they continue to grow apace.
In July, Augur presented the second version of the decentralized platform. In the same month, the Omen platform for prediction markets built on the Gnosis protocol began operating.
In October, the Polymarket prediction platform with automated market maker technology attracted $4 million, to help advance to the second beta phase.
The difference between decentralized and centralized prediction markets lies in greater anonymity and lower fee levels. The most well-known service PredictIt charges 10% of all winnings. Bookmakers charge 3% to 7% and also impose limits on stake sizes.
According to the Winklevoss brothers, regardless of the outcome of the forthcoming elections, Bitcoin will be the winner. They attribute this to the U.S. economy’s state that will not allow the Fed to abandon active monetary stimulus.
#Bitcoin is the independent candidate.
— Cameron Winklevoss (@cameron) November 2, 2020
Both political parties are addicted to the Fed’s money printer, so regardless of who wins the election, the only real, long-term winner will be #Bitcoin.
— Tyler Winklevoss (@tyler) November 2, 2020
In October, the Winklevoss brothers confirmed their earlier forecast, saying that sooner or later Bitcoin would be worth $500 000.
In September, the MicroStrategy CEO predicted that in the coming months other private companies would move to Bitcoin.
According to Bitcoin Treasuries, the volume of investments by public companies in the leading cryptocurrency exceeded $10 billion.
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