CHART: Crypto election markets and polls reveal contrasting probabilities
A unique phenomenon impacting media coverage of the US presidential election has emerged within the crypto industry. Over the course of four weeks, prediction markets that accept cryptocurrency bets, such as Polymarket and Kalshi, have consistently shown increasing odds in favor of Donald Trump over Kamala Harris.
Interestingly, traditional polls conducted during the same period display tighter odds or favor Harris. Protos has conducted a side-by-side comparison of election odds on Polymarket and Kalshi, juxtaposed with predictions by the New York Times (NYT) and Nate Silver since October 1, revealing a clear divergence.
The question arises as to whether this year’s “real money at stake” prediction markets truly provide a more accurate forecast of the November 5 election, or if these thinly traded and largely offshore markets are easily influenced by pseudonymous traders with substantial funds.
The disparity in predictions varies significantly depending on the source, with Trump enjoying wide support from crypto voters. His efforts to court the crypto community, including speaking at a major Bitcoin conference and expressing support for digital assets and blockchain technology, have helped boost his favorability among this demographic.
Harris, on the other hand, has been more reserved in her comments about the crypto industry, but her staff has expressed positive sentiments towards innovative technologies and her intention to safeguard cryptocurrency investments.
It is evident why Trump is favored among crypto voters, as their money has flowed into prediction markets such as Polymarket and Kalshi, giving him a significant lead over Harris when compared to national polling averages. Consequently, media outlets frequently reference these crypto-influenced election odds as an indication of Trump’s increasing advantage over Harris in recent weeks.
However, it is crucial to note that these crypto-friendly platforms have only been established for this election cycle. Averaging the predictions from traditional pollsters like Nate Silver, NYT, or FiveThirtyEight reveals a much closer race, with odds varying by only a few basis points.
While Polymarket has garnered disproportionate attention from the US media despite its alleged ban on US users, it is not unique in predicting Trump’s victory in the 2024 election. Non-crypto publications such as The Economist and Fox News also lean in favor of Trump.
Most traditional polls currently show a near-even split, without a significant margin of error to project the outcome accurately.
Fortunately, the divergence in electoral forecasts is a deliberate characteristic of American democracy. This year, crypto prediction markets have allowed groups of traders to wager millions, attract media coverage, and draw attention to their bets. Traditional polls, meanwhile, follow a distinct methodology.
Ultimately, the true results of the election will only be certain on the evening of November 5.