While the presidential debate might not have had a clear winner in either direction, it seems like the cryptocurrency market might be able to offer a better indication to the results. Looking at the data compiled and analysed by cryptocurrency-based platforms which are gathering insights into user predictions through election contract futures, it seems as though current US President Donald Trump might have got in his own way in the debate.
Using futures-contracts to predict the outcome of the election, the cryptocurrency-based platforms offer tokens to users which two different outcome options:
- “YES Trump” tokens which will reap a massive profit if Trump is reelected but will be worthless if he is voted out, and
- “NO Trump” tokens which will earn investors money if Trump is not elected for a second term.
According to Polymarket, a fresh wave of interest in the predictions market shows that investors do not foresee Trump winning the election, with investors denying “Yes” tokens as the debate continued.
the Trump Election market on Polymarket shot past $100k volume tonight, with Trump “Yes” shares rising early, then falling to 45%
god bless America#Debates2020 pic.twitter.com/tZi3yDXQv7
— Polymarket (@polydotmarket) September 30, 2020
As suggested by Richard Chen, CEO of cryptocurrency derivatives exchange FTX, the interest in predictions market is indicative that investors are aware of the possibility of profit from this election. If the user’s predictions – represented by a 10% crash in the price of YES predictions – come to pass, Trump’s brash responses in the debate might earn him an exit out the white house.
Cryptocurrency and the US Debate: Neither candidate showing strength
According to the market participants, however, the results of the election might not look favourable for Trump, but there’s a possibility he might squeak in another win. According to data collated by Coingecko, the price of YES Trump tokens at one point was favouring Trump over Biden, with the tokens reaching a value of nearly $0.50 before adjusting to a lower value. If Trump wins, the price of the YES Trump token will surge to $1.00 and the NO Trump token will expire and vice versa should he lose.
It’s worth noting that the tokens represent a data-driven prediction of how Americans might vote, but it is limited to those invested and interested in the cryptocurrency industry. The data, well-collected and analysed, does not represent the predictions of all voters and might be skewed. This is especially important, given that Trump has explicitly criticised Bitcoin – and by association the cryptocurrency industry – which would possibly make him unfavourable to Bitcoin bulls.
Bitcoin the ultimate winner of the US presidential debate?
While it might not be obvious who came out on top during the debate between Trump and Biden, it has been suggested that American politics are currently losing and the US dollar will bear the main sufferance as a result. Historically, as the dollar declines, investors look to safe-haven assets to protect the value of their funds. Like gold, Bitcoin tends to increase in value as the dollar dips and this seems to have been the case in 2020 and might continue as the election campaigns proceed.
Growth Lead of Kraken Dan Held commented:
So, tell me, how much faith do you have into the $USD after watching 90 minutes of this madness of 2 people?! Hey, #Bitcoin fixes this!
— Dr. Julian Hosp (DFI = DeFi on Bitcoin!) (@julianhosp) September 30, 2020
If the election continues along the same vein as the recent debate, it’s plausible that the dollar will continue to see a decline, resulting in a massive move towards cryptocurrency and Bitcoin investment. Should this be the case, we might see mass adoption and a shift towards a more blockchain-based future sooner than anticipated.