What Polymarket Got Right

Plus: Pro-crypto candidates win big

Nov 07, 2024

In this week’s edition of The Context, we discuss Polymarket, the price of Bitcoin, and the effect of PACs on Tuesday’s elections.

[Polymarket Leaders?]

Donald Trump’s victory was in line with blockchain-based Polymarket’s presidential election market, which heavily favored Trump even as polls and forecasts suggested a coin toss. 🪙

What Media Said 🧑‍💻:

Polymarket successfully resolved its presidential election market (i.e., paid out winners) on Wednesday morning, reported Sam Reynolds (CoinDesk), parceling out a pot of $3.6B after media outlets called the race. (For technical details: Read Kazu Umemoto’s Bankless guide to “How Polymarket Decisions Gets Resolved.”)
Mark Tuesday a win for Polymarket, said Marc Hochstein (CoinDesk). “The vindication comes after several weeks in which the mainstream media harped on the theory that Polymarket, which runs on crypto rails and has seen billions of dollars in trading volume this year, was being manipulated by pro-Trump forces to inflate his odds” because it differed from polls and pundits’ projections.
The supposed market manipulator, a French trader known as Théo, made out with $48M, said Emily Nicolle & Max Harlow (Bloomberg). $22M of that is from “the platform’s most-popular market, where users bet on which candidate will be the next president.” He snagged an additional $26M on other election-related bets. 🎰
One market Polymarket didn’t get right [but Théo did], noted Felix Salmon (Axios): “At no point before Election Day did the prediction markets give Donald Trump a greater than 43% chance of winning the popular vote.”

PR Perspective 🔎:

In 2008, 538’s election model got the electoral college votes “right” in 49 of 50 states, propelling Nate Silver to stardom. But as 538 and Silver stressed, the model assessed probabilities—it didn’t make predictions. Public misunderstanding of that difference fueled backlash in 2016 when election models “got it wrong” by not giving Donald Trump a higher probability to win than Hillary Clinton. This year, Polymarket’s gotten it “right” and will be viewed as a bellwether for public political sentiment. But there will be times when the wisdom of the crowd doesn’t pan out, meaning the platform must continue educating the public about what these markets can and can’t do.

[PAC’d House? 🏡]

According to a tracker from the Stand With Crypto PAC, 274 pro-crypto congressional candidates were elected compared to 128 anti-crypto candidates. Crypto PACs spent over $130M on downballot races this election cycle, including $40M to unseat Senate Banking Chair Sherrod Brown (D-OH).

What Media Said 🧑‍💻:

“It paid off,” wrote David Yaffe-Bellany (The New York Times). “The arrival of new pro-crypto voices in Congress could offer the industry a path to pass legislation that would defang the Securities and Exchange Commission, the federal agency that has most aggressively pursued crypto companies in court.” But some consumer groups are worried that the crypto industry has gained too much influence.
“The emerging political power of crypto is a remarkable shift from two years ago, when the collapse of FTX and indictment of its founder threatened to derail the industry’s hold on Washington,” wrote Miranda Nazzaro & Taylor Giorno (The Hill).
And the industry isn’t letting up, suggested MacKenzie Sigalos (CNBC). One crypto PAC, Fairshake, has already raised $78M for the 2026 midterms, with major donations from crypto exchange Coinbase and venture capital firm a16z.

PR Perspective 🔎:

Within crypto, there’s the feeling that the industry is an underdog. But to the public, if you spend more than any other industry, it certainly looks like you’re a giant. Americans like the little guy until he gets too big. The question is whether crypto can shift to using soft power instead of hard currency to convince the public and politicians about web3’s importance.

[Bull-y Pulpit? 🐂]

Bitcoin hit an all-time high on election night, surpassing $75,000—then kept going.

What Media Said 🧑‍💻:

“By running on the most pro-crypto election platform ever, Trump made his victory synonymous with a booming crypto market and successfully courted the new voting bloc,” wrote Catherine McGrath (Fortune). “In the immediate aftermath of his win, the entire market soared. While Bitcoin is climbing above $76,000, Coinbase shares have skyrocketed 30%. Similarly, other crypto-related stocks are up as well with Microstrategy gaining 13% and Robinhood gaining 20%.” 📈
Trump’s election is a boon for more than just Bitcoin prices and crypto-company stocks. It could mean more crypto ETFs are coming, opined Shaurya Malwa (CoinDesk). Keep an eye out for Solana ETF applications; SOL jumped 17% on election day. 👀

PR Perspective 🔎:

Although plenty of pro-crypto Democrats were elected on Tuesday, Bitcoin became something of a "Trump trade"—similar to how traditional markets view certain stocks or sectors as tied to specific political outcomes.

[Bonus: What’s Next?]

With former President Trump now President-elect Trump, everyone wants to know what his second term will mean for crypto. A pair of Bens look ahead—and backward:

Connect with YAP Global: Website, X & LinkedIn

The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).

The team: Founder Samantha Yap and consulting editor Jeff Benson, Andrew Wickerson, Emma Murphy, Nathalie Larrea, Trisha Goswami and Shajar Qureshi. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.

This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.

Discussion about this post

Ready for more?