Real-time prediction markets can react faster than polls, making them a key part of the 24/7 news cycle leading up to the Nov. 5 vote. However, Polymarket, a four-year-old crypto-based platform, lacks the liquidity of the capital markets it’s often compared to.

“As an idea, it may feel like a cultural phenomenon, but by the numbers, it’s still tiny,” admitted founder Shayne Coplan when asked about the platform’s potential to predict election outcomes. “In terms of a financial market, it’s still really small.”

Polymarket odds favor Trump

Supporters argue that prediction markets, where participants risk their own money, outperform polls in forecasting elections.

Pollsters’ reputations have been tarnished since Donald Trump’s surprise 2016 win, and their attempts to correct for biases haven’t fully restored confidence in their models.

This has made Polymarket a popular tool, especially on social media, where Elon Musk recently touted it as “more accurate than polls.”

Polymarket users accurately predicted Biden’s dropping out of the race before many expected him to. Currently, the platform favors Trump, giving him an average 64% chance of winning key swing states, compared with 35% for Kamala Harris.

In Wisconsin and Michigan, his odds dip slightly below 60%, but overall, Polymarket places Trump as the front-runner for the Oval Office.

Polymarket is backed by Peter Thiel

Coplan founded Polymarket to cut through media echo chambers and provide a clearer picture of public sentiment. “Polymarket is designed for optimal price discovery, which sets it apart as an information source,” he said.

Like similar platforms, PredictIt and Kalshi, Polymarket allows users to sell contracts early, offering more flexibility than traditional betting. However, it has its skeptics. Polymarket’s user base, which leans libertarian and crypto-savvy, may skew toward Trump owing to dissatisfaction with the current administration’s stance on digital assets. The platform’s backers include Peter Thiel, who donated to Trump’s 2016 campaign; Thiel’s Founders Fund led Polymarket’s most recent fundraising.

Polymarket’s surging growth

Polymarket, built on the Polygon blockchain, has seen rapid growth this election cycle. Its total value locked (TVL) surged from $9.5 million in stablecoins at the start of the year to $220 million. By August, lifetime trading volume had surpassed $1 billion, with nearly $430 million wagered on the U.S. election.

Despite its growth, Polymarket remains illiquid compared with traditional financial markets, making it vulnerable to manipulation.

A few large players, or “whales,” have placed significant bets on Trump, influencing the odds.

For instance, four individuals collectively wagered $25 million on a Trump victory, driving up his chances. In contrast, PredictIt caps individual bets at $850 to mitigate such influence.

Election remains a coin flip

The anonymity of Polymarket also raises concerns about wash trading, a form of fraud where traders manipulate prices by trading with themselves. As a result, Polymarket odds should be taken with caution. Odds of 40% to 60%, for example, often reflect uncertainty rather than a clear forecast.

“Trump’s rally on Polymarket doesn’t reflect a massive revaluation of his odds,” wrote Bitcoin advisor Aubrey Strobel in a recent op-ed. In short, the race remains close.