In today’s world, you can pretty much bet on anything—from whether Taylor Swift will be seen at the next Kansas City Chiefs NFL game to what the next Fed rate cut will be. But a few prediction markets rose astronomically in popularity recently, thanks to the 2024 presidential election—and crypto bros, pollsters, and many onlookers were glued to what Polymarket users were wagering.
For the weeks leading up to the election, users started dumping funds into the cryptocurrency-based prediction market platform. By Election Day, Polymarket users had wagered a whopping $3.2 billion on the outcome of the election, with a majority of bets on a win by former President Donald Trump. The “prophecy,” as many cryptocurrency enthusiasts and Trump advocates have called it—including Tesla CEO Elon Musk—was fulfilled when the former president declared victory this week against Vice President Kamala Harris.
“Make no mistake, Polymarket single-handedly called the election before anything else,” Polymarket CEO Shayne Coplan posted on X on Wednesday. “The global truth machine is here, powered by the people.”
Coplan’s comments are a nod to the fact that even in the days leading up to the election, polls still showed a tight race between Trump and Harris, some of which even showed a slight advantage for the vice president.
But Polymarket wasn’t a major player during the last presidential election. At the time, it was being ideated in a bathroom, of all places.
“2020, running out of money, solo founder, HQ in my makeshift bathroom office,” Coplan posted on X on Wednesday. “Little did I know Polymarket was going to change the world.”
2020, running out of money, solo founder, HQ in my makeshift bathroom office. little did I know Polymarket was going to change the world. pic.twitter.com/TktiCXQgXr
— Shayne Coplan (@shayne_coplan) November 6, 2024
Coplan is among many CEOs and entrepreneurs who came up with their lucrative ideas in strange places. Take Jensen Huang developing Nvidia from Denny’s or Steve Jobs, Steve Wozniak, and Ronald Wayne founding Apple in a garage.
Since Coplan, 26, founded the crypto-based prediction market platform, Polymarket has raised $70 million, and in September reportedly sought to raise an additional $50 million among the election-betting craze. Between September and October, trading volumes on Polymarket more than quadrupled, according to The Block.
Coplan has also earned major backing from statisticians, including the legendary Nate Silver, who is also the founder of poll analysis site FiveThirtyEight. Silver joined Polymarket as an adviser in July when the platform had seen $265 million of bets placed on the election.
How accurate is Polymarket?
Some experts who have been working in election odds for years see prediction markets as the best way to forecast the future.
“Political betting sites are the best at predicting the wisdom of the crowd,” Thomas Miller, a data scientist at Northwestern University, told Fortune’s Shawn Tully. Miller is renowned for his accurate predictions during the 2020 election, and much of his methodology comes from examining prediction markets.
Musk has also chimed in on this subject many times with a central argument that prediction markets are more accurate than polls because cash is involved.
“More accurate than polls, as actual money is on the line,” Musk posted on X in October.
Trump now leading Kamala by 3% in betting markets. More accurate than polls, as actual money is on the line. https://t.co/WrsqZ2z8pp
— Elon Musk (@elonmusk) October 7, 2024
But ahead of election results, naysayers questioned the platform, especially when one user from France had flooded the U.S. presidential market.
“Unlike polls, prediction markets can be influenced by the interests of a small number of large players, as appears to be happening [on Polymarket],” Ryan Waite, vice president of public affairs at public affairs consultancy Think Big, told Fortune in October. “The limitation here is that prediction markets often attract a specific kind of participant: people interested in betting who might not reflect the broader population and they can be influenced by deep pockets, overconfident individuals or herd mentality.”
In the days leading up to the election, the odds of a Trump win grew by the minute—and on election night, as real results started pooling in, his chances skyrocketed. By late Tuesday night, Trump’s odds of winning the presidential election spiked to more than 90%, reaching nearly 100% by the time key swing states were called.
While some researchers accused Polymarket of “wash” trading and it was discovered that one user had been responsible for flooding the U.S. presidential election market, its users accurately predicted the outcome.
“Last night, Polymarket proved the wisdom of markets over the polls, the media, and the pundits,” the prediction platform posted on X on Wednesday. “Polymarket consistently and accurately forecasted outcomes well ahead of all three, demonstrating the power of high volume, deeply liquid prediction markets like those pioneered by Polymarket.”
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