Trump Inches Closer to Harris on Polymarket as Betting Passes $1 Billion

This week in prediction markets:

$1 billion has been traded on Polymarket’s Trump vs. Harris market, with the vice president in the lead.
Market is skeptical bitcoin’s rally will last.
“Black Myth: Wukong” was a major hit for China’s game industry. But the market doubts it will win Game of the Year.

Polymarket bettors have now put over $1 billion on the question of whether Donald Trump or Kamala Harris will take the White House in November. While Trump appears to be closing the gap – Harris now only leads by one point – swing state markets are telling a different story.

Data from the prediction market site gives Harris a greater chance of winning four of the six key swing states, which is unsurprising as those four have historically leaned Democrat.

Data from poll aggregator 270ToWin shows that Pennsylvania and Michigan went to the Democrats in the last seven elections, with the exception of 2016, where they voted Republican. In the 1980s, these two states were consistently red given the popularity of Ronald Reagan, which led to a clear victory for his vice president and successor, George H.W. Bush.

Wisconsin has caught the interest of many poll watchers who call it one of the more competitive states. Wisconsin voted for Donald Trump in 2016, breaking a streak of Democratic wins, and has often shown tighter races between the two parties.

A recent New York Times/Siena College poll shows that the race in Wisconsin is extremely close, with Harris at 49% and Trump at 47%.

Polymarket, however, gives Harris a clean lead in the Badger State, pricing her at 56 cents a share compared to 44 cents for Trump.

Each share pays out $1 (in USDC, a cryptocurrency that trades 1:1 for dollars) if the candidate wins, and nothing if it doesn’t, so the market is signaling Harris has a 56% chance of carrying Wisconsin.

It’s also important to note that polling in Wisconsin often misses the mark, and the state has been decided by less than a point in four of the last six presidential elections.

So the question could be, which is more accurate: unreliable pollsters or political gamblers? Now that Polymarket has cracked the Apple App Store’s list of top magazine and newspaper apps, let’s see if these degen politics junkies can give pollsters a run for their money in these swing states.

Doubts about Bitcoin rally

There’s a strong bullish case for bitcoin, given the Fed’s recent rate cut, the People’s Bank of China’s liquidity injection, and consistent inflows into spot bitcoin exchange-traded funds.

Some market observers are basing their bullishness for bitcoin based on the increased buying of call options priced at $75,000 combined with increased sales of puts.

A call option gives the holder the right to buy bitcoin at a set price later, signaling bullish sentiment, while put buying reflects bearish hedging.

However, traders on Polymarket are skeptical about all of this, only giving a 41% chance the cryptocurrency will trade above $65,000 on Oct. 4.

Traders could be considering the possibility that bitcoin is drifting into “overbought” territory, a product of a price surge that ran a bit too hot.

CoinDesk reported Monday that this perception, reflected in the Crypto Greed and Fear Index, suggests a potential pullback is in the works, especially with the upcoming U.S. ISM Manufacturing data, which has historically triggered price drops if it signals weaker economic conditions.

Over on Kalshi, the U.S.-regulated, dollar-denominated prediction market, bettors remain generally optimistic for bitcoin’s price stability, giving it a 47% chance of finishing the year above $75,000 and a 34% chance of it topping $80,000. Traders are also confident that it will cross its previous all-time high of $73,200 this year, giving this a 58% chance of happening.

Gambling on gaming

The video game Black Myth: Wukong has found success worldwide – a notable achievement for a Chinese gaming industry that was nearly suffocated by Beijing’s regulation. But Kalshi bettors doubt it will win Game of the Year at the 2024 Game Awards.

Bettors on the platform are giving only a 23% chance of the game claiming the title, instead putting their money behind Astro Bot, with a 64% chance.

While Astro Bot has garnered rave reviews, it’s not the cultural phenomenon that Black Myth: Wukong is.

Beijing put the brakes on its fast-growing domestic gaming industry in 2021, refusing to grant licenses for new titles after calling the medium “spiritual opium.” The government had grown progressively more annoyed with the industry’s reliance on “loot boxes,” in-game spending, and incentives for players to log in daily.

The industry was unfrozen in 2022 after promising to reform itself and move away from freemium titles reliant on cash grabs.

That’s when Black Myth: Wukong was born.

Unlike the games China’s industry was known for, Black Myth is a narrative-driven role-playing game inspired by the classical Chinese novel Journey to the West (which holds the same weight in China’s literary canon as Homer’s Odyssey does in the West). It’s designed to be a slow burn.

The game is a massive hit in China, selling over 4.5 million copies in-country in its first week, and has found a following on the international digital game store Steam where it’s the fifth most popular game, with nearly 250,000 concurrent players.