Polymarket U.S. Election Odds Diverge Sharply from Traditional Polls

With barely 21 days left until the U.S. Presidential election, crypto prediction markets are significantly diverging from traditional polls.

Polymarket, which has had bettors wager more than $2 billion on the race between Republican contender Donald J. Trump and Democrat nominee Kamala Harris, has the former ahead by a whopping 21%. Polymarket bets indicate Trump has a 61% chance of winning, with Harris’ odds at 38%.

Meanwhile, traditional polls paint a vastly different picture. Prominent opinion poll analysis website 538 has Harris ahead by 2.4%.

What’s going on? Dennis Porter, co-founder and CEO of the Satoshi Action Fund, which helps politicians make sensible choices regarding Bitcoin policy, weighed in.

“Polymarket is a sentiment poll. It’s gauging the opinions of people monitoring the election,” Porter told The Defiant. “Polls are going directly to voters and asking them who they will vote for.”

Porter also pointed to gender skew as a factor. “The disparity between the two likely stems from the fact that Trump polls much better with the male demographic, especially the young male demographic.”

He added, “Polymarket is going to be less accurate if you take that into account. Men, especially young men, gamble online at much higher rates.”

Cody Carbone, president of the Digital Chamber, a cryptocurrency advocacy group in Washington D.C., added a global perspective. “I’d imagine international influence plays a big factor in Polymarket numbers,” he told The Defiant. That’s because the platform isn’t legally available to Americans, while 538 polls Americans only.

However, Polymarket's odds are closely aligned with those offered by mainstream betting platforms. Odds available on the Betfair betting exchange show 58.8% implied probability of Trump winning.

One Entity To Sway Them All

Data suggests that the results on Polymarket are skewed by a conglomerate of four accounts potentially controlled by a single entity.

A pseudonymous X account dubbed FozzyDiablo pointed out on Oct. 15 that the accounts Fredi9999, PrincessCaro, Michie, and Theo4 have bet $26 million in favor of Trump on Polymarket.

“What's most interesting is when we zoom in on the cluster on the right,” wrote FozzyDiablo. “The betting pattern of each account is very similar, and when one account stops, another picks up. There is very little overlap within each account, suggesting they are all the same entity.”

Additionally, FozzyDiablo said that all deposits were suspiciously similar. All flows come from Kraken and are either $500,000 or $1 million deposits.

Polymarket Is Less Liquid Than People Think

A question that arises is how $26 million can affect a $2 billion market like the U.S. presidential elections.

FozzyDiablo told The Defiant that Polymarket is less liquid than people think “because all the liquidity is rehypothecated.” Rehypothecation is when investors use collateral they do not own to help finance assets. Previously pledged collateral is used as collateral for a new loan, creating a leveraging cycle that boosts profitability but increases default risk.

Data from Dune analytics suggests the same.

Polymarket’s open interest is just over $200 million, which means that a $26 million wager can certainly push the market in one direction or another. The total $2 billion volume is cumulative trades, not necessarily those happening at a specific moment – so a single entity with large orders can sway results.

Whether it’s a predominantly male online presence or a single entity moving the needle, it seems like the U.S. election results will be closer than Polymarket’s prediction. And with crypto becoming a central part of the campaign trail, the industry waits with bated breath.