Polymarket faces scrutiny over election betting surge

Polymarket, a decentralized prediction market platform, has stated that there is no evidence of market manipulation.

This claim comes after it was revealed that a French citizen, known as the whale behind four accounts, wagered over $45 million on Donald Trump winning the US presidential election. Analysts have raised concerns about market liquidity and accuracy, questioning the ability of prediction markets to reflect real-time public sentiment.

Despite generating over $2.4 billion in trading volume since its launch in January, Polymarket’s open interest stands at around $267 million, indicating a relatively illiquid market. Analysts from Kaiko have noted that the platform’s low liquidity could impact the predictive value of the betting opportunities available.

On Friday, a trader named “GCorttell93” transferred $3 million to Polymarket and placed a substantial bet on Trump, causing significant slippage. This trader acquired shares at odds of 99.7%, offering a meager return of 0.3% if successful. Such large trades can temporarily disrupt market odds, as seen when the odds quickly reverted to 64%.

Analysts caution that while Polymarket’s market opportunities resemble those on regulated platforms like Kalshi and PredictIt, they should not be treated as traditional polls. Current national poll averages show Kamala Harris leading Trump by 49% to 46%, within the margin of error.

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