The prediction market says Donald Trump leads Kamala Harris in terms of votes
In the words of Yogi Berra, “it is difficult to make predictions, especially about the future.” But the beloved dad joke baseball icon is blissfully ignorant of cryptocurrency.
Election Day is approaching, with the spooky season in the air, like vampires or ghosts around the corner. But while predicting the future can be a fool’s game, Americans are trying to get a deeper understanding of what could be. most recent election in recent history—and unprecedented times require unprecedented resources.
For the 2024 presidential election, it may be wise to not only look at the polls but also check the prediction markets. “Markets tend to be the best source of information available,” says Rutgers statistics professor Harry Crane. Luck.
The polls are tight, but Democratic candidate and Vice President Kamala Harris has a slight lead over Republican candidate and former President Donald Trump, according to the weekly newspaper Morning Consult. opinion pollNate Silver quote five thirty eight data. However, prediction markets paint a different and perhaps more accurate picture, Crane claims.
Prediction market website Anticipate it currently ranks Trump ahead of Harris—and elsewhere, on the crypto side of the world, Trump is also leading. Polymarket, a cryptocurrency-based prediction market, is currently showing Trump front in the presidential election from 57.7% to 41.9%. However, Harris is predicted by the same website to win the award popular vote increased from 61.9% to 37.8%.
“Political betting sites are the best at predicting the wisdom of the crowd,” says Thomas Miller, a data scientist at Northwestern University. luck Shawn Tully. While they don’t necessarily have a broader scope, these markets can predict the future better than polls because they are economically motivated, Crane added. “The poll asks who you will vote for…no one cares who you will vote for. What people care about is who will win,” he said.
Have learned Regarding the accuracy of PredicIt’s previous cash markets, Crane said “those markets were actually quite accurate, at least more accurate than the poll aggregators at 538, etc.” But surprisingly, cryptocurrencies carry even more weight.
Cash prediction markets beat the polls and crypto prediction markets beat cash
Cryptocurrency may be slowly losing public interest, but it has found a particular niche in the world of prediction markets. Currently, more than $1.9 billion in cryptocurrency has been traded on the site.
Crane noted that both markets have “skewed demographics,” explaining that they are often male-dominated and many don’t even have Americans in them. And not everyone is an active trader, as people often make small bets at a time and don’t go back. Even so, they still carry more weight than opinion polls, he said. Of course, Trump has more favors those in the crypto space, which could tip the balance in his favor on the said website. But as Crane pointed out, other non-crypto prediction markets like Betfair and Kalshi are mostly in line with Polymarket.
“If I had to pick one market it would be Polymarket which is the closest to the best estimate,” Crane said, adding that he tries to get the consensus market price. But just as there is a margin of error in polls, there is also a margin of inefficiency in prediction markets, according to Crane.
In his opinion calculatePolymarket had the smallest margin of underperformance at 1.33% compared to PredictIt’s 11.08%. PredictIt has a 10% commission on profitable trades and also has some regulations such as a betting limit of $850 per trader and 5,000 participants in any given market. “Markets with more liquidity, lower fee structures and fewer regulatory restrictions are the ones that tend to be most accurate,” Crane said, which leads to Polymarket gaining an advantage. .
Although Polymarket hasn’t been around or in research as long as PredictIt, Crane says if you forced him to bet on it, he’d say the former is shaping up to be more accurate this cycle. But that “doesn’t mean Trump will win.” Rather, it was “a good signal and a more accurate signal than I expected from PredictIt,” Crane said.
Just in the past month, the market predicted Kalshi and interactive brokers is already legal online in the United States. These markets, which are only open to U.S. participants, are less subject to trading restrictions than PredictIt, but are still more likely to have a slightly higher margin of inefficiency according to Crane’s calculations. However, in the long run, these marketplaces may outperform Polymarket because it is easier to use and perhaps less unfamiliar than cryptocurrency, Crane explained.
However, foul play can occur in these prediction markets, because female New York Times deal book point bet big in favor of Trump from single users as well Comments by Elon Musk about prediction markets. Acknowledging said allegations, Crane noted that there is a difference between someone who buys a lot of shares of something and someone who is intentionally manipulating the market. In the latter case, the market will usually correct itself. However, he doubts this is necessarily the case because prediction markets and other polls have favored Trump in various ways.
Who actually wins is still “anyone’s guess”. But cryptocurrencies can adapt better to volatility in such a tight race. Either way, Polymarket is becoming a short-term view of the future. “Polls will likely continue to favor Trump, at least for the next week. And the reason I say that is because the market tends to run about a week before the election,” Crane added.
