Prediction Markets Experience 565% Growth in Q3, Driven by US Elections
Decentralized prediction markets have seen a significant surge in growth in the third quarter of 2024, largely due to bets on the upcoming United States presidential election, which could potentially impact cryptocurrency regulations.
Increased Betting Volume in Prediction Markets
The betting volume in prediction markets experienced a 565.4% increase in Q3, reaching a total of $3.1 billion across the three largest markets. This is a notable increase from the $463.3 million recorded in the second quarter of 2024.
The substantial growth in prediction market volume is largely attributed to the increased bets on the outcome of the US elections, as stated in an Oct. 14 report by CoinGecko:
"Prediction markets gained momentum in 2024 Q3, growing 565.4% due to pundits betting on the upcoming US elections."
Decentralized Prediction Markets and US Election
According to billionaire Elon Musk, decentralized prediction markets could potentially offer more accurate predictions for the 2024 US election results than traditional polling systems. Prediction markets like Polymarket allow users to stake stablecoins like USD Coin on the outcome of a specific event.
Polymarket Dominates Prediction Market
As of September 2024, Polymarket, the largest decentralized platform, held over 99% of the market share. Over 46% of Polymarket's year-to-date (YTD) volume was driven by the US presidential elections poll, as reported by CoinGecko:
"Approximately $1.7 billion of bets have been placed on the 'US Presidential Election Winner' since the start of 2024, accounting for ~46% of Polymarket's yearly volume."
The betting volume on Polymarket grew by 713%, and transactions increased by 848% during the third quarter of 2024. Currently, Polymarket holds over $172 million in total value locked (TVL), according to data from DefiLlama.
Trump Leads Harris on Polymarket
On Polymarket, former President Donald Trump is currently leading Vice President Kamala Harris by eight points. Polymarket data shows that former President Trump has a 53.8% chance of winning the election, while only 45.3% of Polymarket users have bet on Harris.
The odds shifted in Trump's favor on Oct. 4, marking a significant reversal from September. By Oct. 12, Trump was leading by over 10 points, as reported by Cointelegraph.
Bottom Line
The surge in prediction markets, particularly in relation to the US elections, is a fascinating development. It not only indicates the increasing interest and engagement of the public in political events but also highlights the potential of decentralized platforms in providing accurate predictions. What are your thoughts on this development? Do you believe that prediction markets can offer more accurate forecasts than traditional polling systems? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is available every day at 6 pm.
