Since its inception in January, the US presidential election market on Polymarket has amassed over $2.4 billion in trading volume.
By Bena Ilyas
Edited by Julia Sakovich
Updated
3 mins read
Polymarket, a decentralized prediction platform, recently captured attention as large-scale bets emerged on the US presidential election outcome. However, concerns about market manipulation emerged, but Polymarket maintains that no concrete evidence backs these allegations. The substantial slippage issues have intensified scrutiny among both analysts and platform users.
On Thursday, Polymarket announced that a French trader with extensive financial experience managed four major accounts placing over $45 million on Donald Trump winning the presidency. Consequently, this disclosure has fueled discussions about prediction market integrity and the impact of substantial wagers on results.
Earlier warnings from on-chain investigators suggested that accounts, including one labeled “Fredi9999”, might be controlled by a single entity aiming to tilt the odds in favor of Trump. However, a Polymarket spokesperson addressed these concerns, stating:
“Based on the investigation, we understand that this individual is taking a directional position based on personal views of the election. Further, our investigation to date has not identified any information to suggest that this user manipulated, or attempted to manipulate, the market. This user has agreed not to open further accounts without notice.”
Prediction markets like Polymarket aggregate real-time public sentiment, providing insights that can sometimes surpass traditional polling methods. Analysts from Presto, a trading and financial services firm, emphasized that these markets effectively capture trader enthusiasm and, with the support of blockchain technology, enhance liquidity aggregation to produce reliable signals.
Since its inception in January, the US presidential election market on Polymarket has amassed over $2.4 billion in trading volume, making it the platform’s largest market. Currently, the odds reflect Trump leading Kamala Harris with a 63.9% probability of winning compared to Harris’s 35.8%.
Despite Polymarket being technically restricted for US users, Kaiko analyst Adam Morgan McCarthy noted that the odds align closely with other regulated platforms. For instance, Kalshi shows Trump at 61% and PredictIt at 59%, both favoring him similarly to Polymarket’s figures.
Bernstein reports that national polling averages indicate Harris leading Trump by 49% to 46%, which falls within the margin of error. This discrepancy between polls and Polymarket’s odds has fueled debates about the platform’s predictive accuracy.
Open interest on Polymarket, representing the total value of outstanding positions, is approximately $267 million. This relatively low figure suggests that the market remains fairly illiquid while trading volume is high. Presto analysts argue that with an average daily turnover of $65 million, manipulating the market becomes impractical and less advantageous.
However, the illiquidity was highlighted when a trader known as “GCorttell93” transferred $3 million to Polymarket and immediately placed the entire amount on Trump. This move temporarily cleared the order book, leading to significant slippage. The trader purchased $274,300 worth of Trump shares at 99.7% odds, which would only yield a 0.3% return if successful.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
