Biden’s Exit Spurs Record Polymarket Betting Activity

Joe Biden’s unexpected decision to bow out of the 2024 presidential race has sent shockwaves through political circles and prediction markets. Immediately after the announcement, Polymarket, a leading decentralized prediction platform, experienced its highest spike in betting activity ever. Daily trading volume surged to a record high of $28 million, showcasing enhanced uncertainty and interest in the approaching election.

Election Drama Creates Wagering Opportunities

While it’s not unprecedented for US presidents to opt out of a second term — historical figures like James Polk and Lyndon B. Johnson have done so — Biden’s decision stands out for its timing. With the Democratic National Convention just a month away and only days after Biden tried to reassure his supporters that he wouldn’t give in to internal party pressures, the election has entered uncharted territory.

Following Biden’s announcement, the daily volume on the Polymarket platform surged to as high as $28 million, topping its previous records. A month earlier, Polymarket averaged $4 million to $5 million daily volume, surging after the contentious debate between Biden and Donald Trump that had already stirred speculation about Biden’s political future.

The record-shattering action on Polymarket comes amidst a broader frenzy on election-related contracts. Political markets have seen more than $500 million in bets. Those include $319 million on predicting the winner of the US presidential election and another $212 million on the Democratic nominee, with Vice President Kamala Harris as a favorite.

Betting on Politics Is Increasingly Popular

Polymarket allows users to bet on the outcomes of many sports, geopolitics, and pop culture events by buying and selling shares between $0.00 and $1.00. The price of a share reflects what the market believes is the probability of an outcome occurring. A share priced at $0.50 translates to a 50% chance of it happening. If the event occurs, that share’s value doubles to $1.00.

An increase in political betting on Polymarket shows the interest of gamblers looking for more than just regular wagering on sports. The platform circumvents the ubiquitous restrictions on political betting by creating a cryptocurrency-based marketplace where users can purchase shares of event outcomes, skirting the regulatory attention that conventional betting typically attracts.

Prediction markets could have real staying power, thanks to platforms that not only are tamper-proof and transparent but also provide liquid bets with real-time consensus data.

Lorenzo Valente, ARK Invest analyst 

The withdrawal of Biden will shake the election scene and bolster growth and engagement for platforms like Polymarket as people search for new ways to engage with and profit from the rapidly changing political scene. All eyes will follow how these markets react to the unfolding political drama throughout the election.