In brief
- The US election is likely going to Joe Biden, according to the betting odds on the FTX prediction market.
- Most other crypto betting markets, however, are still saying the US election is too close to call.
- Uncertainty over who might win the election is due to mail-in votes yet to be counted.
The United States still doesn’t know who its next president will be. But as ballots in deciding states are still being counted, betting odds on a leading cryptocurrency-based prediction market suggests it's a wrap: On the FTX prediction market, President Donald Trump’s reelection chances have declined by over 50% since the early hours of November 4.
Prediction markets are used to anticipate and invest in expected outcomes of major future events, like elections. In the cryptocurrency world, Ethereum-based tokens expire at either $1 or $0 depending on whether their corresponding prediction happens or not. If predictions are right, there is profit to be had. According to FTX, Joe Biden is emerging as a clear favorite.
Trump’s chances of winning, according to FTX, have dropped by 50%. At the time of writing, FTX is the most active prediction market on the US election, with more than $8 million in trading volume over the last 24 hours, per CoinGecko.
For many in the crypto community, including Ethereum co-founder Vitalik Buterin, prediction markets are proving to be more reliable during this election cycle than traditional polls. One major reason cited by Buterin is that prediction markets take into account the possibility of election meddling, unlike traditional polls that make an assumption of fairness.
In addition, these prediction markets involve people’s money. “At the very least, people have to put their money where their mouths are—and so it represents what all of the traders really think,” Sam Bankman Fried, CEO of FTX, told Decrypt.
FTX’s figures might be clear cut at the moment, but other prediction markets are split.
Using figures published by CoinGecko, the top US Election coins by market capitalization give no real indication as to who will walk into the White House as the victor of this hard fought election.
As the picture above shows, the TRUMPWIN token has experienced a 10% rise in the last hour, valued at $0.14. In contrast, TRUMPLOSE has experienced a short drop of 4.3%, but it is valued much higher at $0.84. This means that onlookers, at the moment, believe Trump’s defeat is far more likely than Trump’s reelection.
Further down the table, NOTRUMP and YESTRUMP flip the table. NOTRUMP is valued at $0.68, and YESTRUMP is valued at $0.40. These figures show a prediction leaning towards a Biden victory.
Why the US election might be too close to call
The prediction markets are likely struggling to name an out and out winner because the vote count shows a close contest.
As of publication time, there are six states where the voting outcome is still unknown. Wisconsin; Nevada; Michigan; Pennsylvania; Georgia; and North Carolina.
According to the New York Times, Donald Trump is the clear favorite in North Carolina, but in Pennsylvania, a state long considered a swing state, things are not quite as they seem. Donald Trump has a double-digit lead here, but the remaining votes to be counted are mail absentee votes, which are expected to lean heavily to Joe Biden. So far, mail absentee votes already counted have favored the Democratic candidate by a huge margin of 78% to 21%.
In the remaining five states, mail-in votes are playing a big role, but demographics are also muddying the waters. For example, in Georgia, Donald Trump leads by two points with 90% of the vote. In Michigan, the president has been in the lead throughout election day. Yet, in both states, heavily Democratic territories are yet to have their votes counted. The race is close enough in these states that it is impossible to call until every vote is counted.