As the U.S. presidential election inches closer, billions in crypto-backed bets have flooded prediction markets, positioning Donald Trump as the preferred candidate over Kamala Harris. Platforms such as Polymarket and Kalshi—leaders in this emerging space—present a significant lead for Trump, contrasting with conventional polling that shows a neck-and-neck race. With crypto markets expanding rapidly and election-related contracts surging in popularity, the outcomes on these platforms have ignited debate: Are these new-age markets accurate predictors, or do they merely represent the biases of a small, crypto-savvy subset of the population?
Prediction markets have gained momentum over the past five years, fueled by the rise of decentralized finance (DeFi) and the global cryptocurrency boom. These platforms allow individuals to stake money on future events, with election outcomes being one of the most popular contracts. Polymarket, the busiest prediction market, has seen a staggering $3.1 billion in trading volume, mostly centered on Trump-Harris wagers. Kalshi, a regulated U.S. platform, has also experienced unprecedented trading activity, drawing nearly $197 million in its presidential election contracts and $33.8 million on bets focused on the Electoral College margin.
This level of trading volume underscores how powerful and speculative prediction markets have become within the crypto ecosystem, drawing interest and funds from across the globe. Elon Musk himself has weighed in, asserting that prediction markets are “more accurate than polls, as actual money is on the line.” With the stakes higher than ever, mainstream news outlets have also started paying attention to these markets, using their odds as indicators of voter sentiment.
As of Monday, Trump leads Harris on Polymarket with a 57% to 43% split in probability, while on Kalshi, the margin is a narrower 51% to 49% in Trump’s favor. These figures contrast sharply with public opinion polls, which generally show a closer race. The numbers from these markets reflect a different perspective on the election’s outcome—a view that potentially leans toward Trump’s victory.
In Polymarket’s case, each wager reflects the assumed probability of an outcome. A contract predicting a Trump win costs around $0.58, while a contract for Harris is priced at about $0.42. Winning contracts pay out $1 each, incentivizing high-stakes bets and rapid trading. On Kalshi, all traders are required to undergo rigorous vetting, and caps are set at $7 million for individual traders and $100 million for eligible contract participants. Yet, even with these restrictions, Kalshi has attracted significant interest and volume, particularly as the election date nears.
The disparity between prediction market odds and public opinion polling has raised questions about the reliability and representativeness of crypto-driven platforms in reflecting mainstream sentiment. Unlike conventional polls, prediction markets are shaped by the volume and value of bets, which means that larger bets from a select few can heavily influence market odds.
“Your average voter isn’t spending time or money on prediction markets—those platforms are being dominated by crypto-native users, and those users are voting for Trump,” noted Michael Cahill, CEO of Web3 developer Douro Labs. Cahill’s view reflects a broader sentiment that prediction markets may primarily capture the biases of a tech-savvy, crypto-invested minority rather than the broader voter base. As a result, the odds on these platforms could reflect the inclinations of crypto traders more than the general U.S. population.
Prediction markets operate differently from polls, functioning more like stock exchanges where traders buy and sell contracts based on perceived probabilities. On Polymarket, for instance, a French national has reportedly placed significant bets on Trump, even though U.S. citizens are restricted from participating due to regulatory issues. These large wagers from foreign traders contribute to the volatility and unique dynamics of prediction markets.
Crypto exchange dYdX has further complicated the betting landscape by enabling leveraged bets linked to Polymarket’s odds. These perpetual futures contracts allow users to magnify their exposure, increasing both potential gains and risks. Adam McCarthy, a research analyst at Kaiko, a digital market data provider, noted that Polymarket’s headline volume includes bets on former candidates, such as Nikki Haley and RFK Jr., indicating that the cumulative figure of $3.1 billion doesn’t entirely reflect active bets on Trump and Harris alone.
With $1.97 billion directly tied to the Trump-Harris matchup on Polymarket, McCarthy’s insights underscore the nuances of these markets and how cumulative volume may not equate to actual money at risk on any single candidate. Prediction markets, therefore, carry inherent volatility and may not provide the clearest picture of the election’s likely outcome, though they continue to draw attention and capital.
The scale of election betting on Polymarket and Kalshi has dwarfed previous activities on these platforms. By October 2024, Polymarket’s trading volume reached $1.1 billion—its most active month to date, surpassing typical monthly averages by a wide margin. Though the activity has slowed somewhat in the initial days of November, it’s still well above historical figures, demonstrating the public’s appetite for high-stakes election speculation.
These platforms offer far more than presidential predictions, allowing users to wager on a vast array of topics, including outcomes of Federal Reserve meetings, major sporting events, celebrity activities, and even who the next James Bond might be. The U.S. election, however, remains the undisputed centerpiece of these platforms, reflecting not only the intensity of public interest but also the unique volatility associated with American politics.
After the election on November 5, prediction markets like Polymarket and Kalshi face a new challenge: maintaining relevance and activity in a post-election environment. Unlike traditional sports betting or stock trading, which offer continuous opportunities, political prediction markets are driven by cyclical events. This raises questions about whether they can sustain their momentum.
Kaiko’s McCarthy acknowledged this uncertainty, noting, “There’s a big test on how they manage to stay relevant after the election.” While Polymarket and Kalshi have succeeded in capturing public interest during the election cycle, they will likely need to diversify their offerings to retain users and sustain trading volumes. Future contracts on significant events, such as upcoming congressional races or major policy decisions, may play a role in keeping these platforms active.
Whether prediction markets represent a genuine indicator of future events or a speculative bubble remains to be seen. Proponents argue that the commitment of actual funds makes these markets a more reliable forecast tool than traditional polling. In Elon Musk’s view, the financial stakes involved mean that traders are less likely to act on wishful thinking, making their bets a purer form of forecasting.
However, critics maintain that the influence of a crypto-heavy user base may introduce bias, skewing results toward candidates who enjoy greater support among digital finance enthusiasts. Unlike broad opinion polls, these markets have a more limited demographic reach, leading some to question their predictive value.
The regulatory environment adds another layer of complexity. Kalshi is regulated by the U.S. Commodity Futures Trading Commission (CFTC), ensuring a level of oversight that Polymarket, a decentralized platform, lacks. This distinction could influence the perception of these platforms’ credibility, as regulated markets often instill greater confidence in the accuracy of predictions.
