Polymarket Trading Explodes as 2024 Election Enters Uncharted Territory

This week in prediction markets:

• It’s market mania as President Joe Biden declines to run for a second term.

• One market went to the cats, as bettors debate the first billion-dollar cat-themed meme coin.

• Everyone thought CrowdStrike’s follies would be fixed in a day. They were wrong.

Joe Biden’s decision not to seek re-election isn’t completely unprecedented: U.S. presidents from James Polk to Lyndon B. Johnson also declined to serve another term for one reason or another.

But what is unique is how late Biden decided to throw in the towel, only a month before the Democratic National Convention (where the party officially decides who its presidential candidate is), and only days after he told party faithful that the “elites” wouldn’t succeed in kicking him out.

The decision fueled a surge in bets on election-related contracts on the Polymarket prediction market, pushing volume to levels never seen in the platform’s history.

According to a Dashboard powered by Dune Analytics, daily volume on the platform pushed past a record $28 million as bettors raced to take a position on a presidential race that’s unlike any other in recent history.

In comparison, a month ago, the platform was doing $4 million to $5 million in average daily volume in the aftermath of the debate between Biden and Donald Trump, which is when calls for Biden to step down grew louder.

The number of daily active accounts, or wallets, has also more than doubled in the last month, up to nearly 6,000 from roughly 3,000 a month ago.

Bettors have also pooled well over $500 million on some of the largest political contracts on the site: The market for the U.S. presidential election winner has $319 million invested, one for the Democratic nominee is over $212 million (Vice President Kamala Harris is the overwhelming favorite), while another to decide who will be the Democratic candidate’s vice presidential running mate has $10 million.

Right now, the number to beat is $744 million, which was how much was bet on Betfair, the U.K.’s largest betting platform, for the 2020 election.

But it’s only July; there are still 3 1/2 months until the election. The question is, will Polymarket hit $1 billion?

A meme coin cat topped $1 billion

The Polymarket contract asked the burning question: Which cat-themed meme coin would be the first to hit a $1 billion market value?

In early April, POPCAT’sodds looked bleak at 2%, behind Keycat and Hobbes, two other cat-themed tokens.

The market racked up $4.6 million in trading volumes since going live in March.

In the running were tokens from several blockchains, such as Base, Ethereum and Solana.

The resolution drew some drama, however, after a single $630,000 buy of the token apparently caused a spike that helped push it over the $1 billion market cap threshold – with some arguing it was an act of market manipulation.

“Okay so this is interesting because that’s clearly market manipulation, but technically it did cross $1 billion on 1 website. Someone here with a vested interest in Popcat has manipulated the market and pushed it over,” wrote Polymarket user @The_Guru55.

“Literally a 1 second pump with 1 order on 1 website is pretty questionable,” the person added.

Polymarket’s decision that POPCAT won remains in place and has not been disputed as of Monday, however.

The market thought the CrowdStrike Windows snafu would be an easy fix. It was wrong.

A faulty patch for security software CrowdStrike pushed out on Friday sparked chaos, as it bricked Windows computers around the world, first in Europe and Asia during their business days, then the United States, as the country woke up.

As Asia’s business day concluded and Europe awoke to PCs frozen with blue screens of death, a Polymarket market was fairly certain this wouldn’t be a huge deal and a fix would happen by Friday night, putting the odds at 89%.

But the market was wrong. As CrowdStrike engineers published instructions on how to do an initial fix – which required a significant amount of effort for each locked PC – the problems compounded. Over 2,500 flights were canceled and 8,000 delayed, with Delta Airlines still rebooking passengers as of Monday.

“The scenario of any [anti-irus] software pushing an update that behaves like this has been a ‘worst nightmare’ for two decades,” Steven Sinofsky, the former president of Microsoft’s Windows division, posted on X.

The “no” side of the contract – those betting a resolution wouldn’t come Friday – was lightly held, with only three bettors holding a collective 45 shares. In total, just over $90,000 was on the line.