Rollercoaster US Election Floods Crypto-Betting Site With Wagers

(Bloomberg) — The turbulent U.S. presidential election has inundated cryptocurrency betting site Polymarket with so many bets that the site has decided to upgrade its platform to accommodate the increased volume of incoming funds.

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Polymarket said Wednesday it will begin integrating software from Miami-based MoonPay, which allows users to pay for their bets using bank transfers and credit cards. Bettors currently buy the stablecoin USDC on a crypto exchange and transfer it to Polymarket before placing their bets.

Driving the frenzied betting is an election in which one candidate — Donald Trump — survived an assassination attempt shortly before incumbent Joe Biden dropped out of the race following a Democratic uprising. Betting volumes on Polymarket reached a record $260 million so far in July, more than a third of this year’s total, according to data from Dune Analytics.

“We’ve found a really incredible amount of product-market fit lately as we’re in the U.S., which has been through some of the most unpredictable and volatile elections in living memory,” David Rosenberg, Polymarket’s VP of Strategy, said in an interview.

More than $366 million has been bet so far this year on the winner of the November election, in which Trump will likely face Vice President Kamala Harris.

Polymarket is not available in the U.S. Its rapid growth comes as the U.S. Commodity Futures Trading Commission is considering a proposal to ban trading in derivatives that bet on political contests and sports games, a category known as event contracts.

Polymarket was fined by the CFTC in early 2022 after the regulator alleged it offered illegal commerce services. As part of a settlement, the company promised to discontinue its services in the U.S. while continuing to operate overseas. J. Christopher Giancarlo, a former CFTC chairman during the previous Trump administration, joined Polymarket’s board months later.

$1.4 Million Bet on Trump

The most popular charter on New York-based Polymarket currently shows Trump with a 61% chance of beating Harris. His odds improved slightly after Biden’s disastrous debate performance in late June, then skyrocketed after the July 13 shooting at a campaign rally in Butler, Pennsylvania. Volumes also track the course of the campaign, rising after Trump’s speech at the Republican National Convention and Biden’s historic decision to drop out of the race.

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The largest bet ever made on the election winner was one that Trump would be re-elected president, worth about $1.4 million as of Wednesday.

Polymarket allows users to bet on the outcome of a variety of events, from politics to sports. Bettors buy what Polymarket calls “yes” or “no” shares that track a particular event, and trading these instruments then determines the odds of the outcome at any given time.

The deal with MoonPay could allow Polymarket to accept crypto assets other than USDC for betting, Rosenberg said. For users unfamiliar with digital assets, the goal is to make payments so seamless that they won’t even know the cryptocurrency is the underlying medium, he added.

“You don’t have to be a deep crypto expert to get something out of this,” he said.

Other popular betting events this year include the launch of U.S. exchange-traded funds tied to Bitcoin and Ether, and the brief leadership crisis at Sam Altman’s OpenAI last November, according to Rosenberg.

Polymarket has raised $70 million in two funding rounds, with the latest stock sale led by Peter Thiel’s venture capital firm Founders Fund, Bloomberg News reported in May.

(Number in fifth paragraph updated.)

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