With 77 days left before Election Day in the U.S., Polymarket could perhaps be viewed as an early winner, as political wagers account for an increasing portion of bets on the prediction platform.
Approximately 88% of Polymarket’s volume this year has come from election-related markets, according to data compiled by Richard Chen, a former general partner at the crypto venture capital firm 1confirmation. On a monthly basis, he found that the ratio of political activity steadily increased.
How much of @Polymarket’s volume is the election?
1) Here is a weekly volume graph of election vs. non-election markets. 88% of volume has been election related since the start of 2024. pic.twitter.com/JFipeSeiu9
— Richard Chen (@richardchen39) August 19, 2024
When this November’s presidential election was far on the horizon, political bets accounted for 55% of Polymarket’s monthly volume in January. Following several election twists, such as Joe Biden’s decision not to run, that ratio had climbed to 96% of volume in July.
With over $640 million bet on the winner of the White House, politics’s dominance should come as no surprise, Chen told Decrypt. However, he said that non-election markets have also grown notably in terms of volume, notching $24 million in July compared to $15 million in January.
“A rising tide lifts all boats,” he said. “Non-election markets have seen a good uptick in volume, with election activity possibly spilling over into other areas.”
Lauded by crypto visionaries like Ethereum co-founder Vitalik Buterin, Polymarket’s growing popularity has established prediction markets as an area of industry intrigue. For example, the Solana-based protocol Drift expanded into prediction markets on Monday. But following November’s election, political markets won’t be there to drive bets from the crypto market.
Based on his analysis, Chen—who compiles a number of data dashboards on the Dune crypto analytics platform—said Polymarket volumes will likely dip after Americans choose their next commander-in-chief. Still, it wouldn’t be surprising if Polymarket activity settles above where it was before bettors began positioning around candidates and outcomes, he said.
When it comes to non-political markets, Chen identified two key buckets: crypto and pop culture. This year’s standouts in the latter, he said, include betting on whether the Martin Shkreli-backed DJT token was legit, whether Caitlyn Jenner’s social media account was hacked, and the Olympics.
Under the umbrella of crypto, Chen said that markets focussed on when the launch of spot Bitcoin and Ethereum ETFs were a particular draw. Between approvals for those two groups of offerings, the respective markets saw around $25 million in total bets combined.
Chen said that he’s been interested in Polymarket “since the beginning,” participating on the platform around the time of the 2020 presidential election. Compared to then, he said “crypto is a lot more mainstream,” which could contribute to Polymarket’s ascension.
“It’s not going to be surprising if volumes dip post-election,” Chen said. “But if you ignore the past 12 months of the election year, the trend line is still upward.”
Edited by Ryan Ozawa.
