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Rollercoaster US Elections Flood Crypto Betting Site With Bets
(Bloomberg) — The turbulent U.S. presidential election has flooded cryptocurrency betting site Polymarket with so many bets that the company is upgrading the platform to handle growing volumes of incoming funds.
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Polymarket will begin incorporating Miami-based MoonPay’s software, which will allow users to pay for their bets via bank transfers and credit cards, the companies said Wednesday. Bettors currently buy the USDC stablecoin on a cryptocurrency exchange and transfer it to Polymarket before placing bets.
Driving the betting frenzy is an election that has already seen one candidate, Donald Trump, survive an assassination attempt, shortly before incumbent Joe Biden dropped out of the race after a Democratic Party revolt. Betting volumes on Polymarket have hit a record $260 million so far in July, more than a third of this year’s total, according to data from Dune Analytics.
“We’ve recently found an incredible product-market fit as we navigate the U.S. through probably the most unpredictable and volatile election in living history,” said David Rosenberg, vice president of strategy at Polymarket, in an interview.
More than $366 million has been wagered so far this year on the winner of the November election, where Trump will likely face Vice President Kamala Harris.
Polymarket is not available in the United States. Its rapid growth comes as the U.S. Commodity Futures Trading Commission weighs a proposed ban on trading in derivatives that bet on political contests and sports games, a category known as event contracts.
Polymarket was fined by the CFTC in early 2022 after the regulator said it offered illegal trading services. As part of a settlement, the company promised to reduce services in the United States while continuing to operate overseas. J. Christopher Giancarlo, former chairman of the CFTC during the previous Trump administration, joined Polymarket’s board months later.
A $1.4 Million Bet on Trump
The most popular contract on New York-based Polymarket is currently calling for a 61% chance of Trump beating Harris. Its odds rose slightly after Biden’s disastrous debate performance in late June, then spiked following the July 13 shooting at a campaign rally in Butler, Pennsylvania. Volumes also track the campaign arc, rising after Trump’s speech at the Republican National Convention and Biden’s historic decision to drop out of the race.
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The largest single bet so far on the election winner is worth about $1.4 million, on Wednesday, that Trump will become president again.
Polymarket allows users to bet on the outcome of a variety of events, from politics to sports. Bettors buy what Polymarket calls “yes” or “no” stocks that follow a particular event, and the buying and selling of those instruments then determine the odds of the outcome at any given time.
The MoonPay deal could also allow Polymarket to accept crypto assets beyond USDC for betting, Rosenberg said. For users who aren’t familiar with digital assets, the goal is to make payments so seamless that they don’t even know cryptocurrency is the underlying medium of transaction, he added.
“You don’t have to be a deep cryptocurrency expert to get something out of this,” he said.
Other popular betting events include the debut of U.S. exchange-traded funds tied to Bitcoin and Ether this year and Sam Altman’s brief leadership crisis at OpenAI last November, according to Rosenberg.
Polymarket has raised $70 million in two funding rounds, Bloomberg News reported in May, with its most recent share sale led by Peter Thiel’s venture capital firm Founders Fund.
(Update the number in the fifth paragraph.)
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