Harris Beat Trump on Polymarket: What Does It Mean for the Crypto Market?
Market participants have bet about $270 million dollars on Harris winning the upcoming presidential election. Does this mean that the community has begun to trust Harris' change of course on crypto policy?
The presidential crypto race is in full swing
The leading cryptocurrency prediction market, Polymarket, has seen a significant shift. For the first time since the nomination of Kamala Harris, the cryptocurrency community is casting its vote for a Democratic candidate. Data shows that 52% of market participants are backing Kamala Harris as the likely winner, compared to 45% for Donald Trump.
Trump had been leading the cryptocurrency prediction market since April, and after a failed assassination attempt on the Republican nominee, his chances of winning rose to 72%. But that figure has begun to decline since Joe Biden dropped out of the presidential race and Kamala Harris entered the game.
Harris began gaining momentum this past weekend after a series of successful rallies in several states. In addition, Democrats launched a "Crypto For Harris" campaign. And experts assured the community that the tough stance of Tim Walz, the Democratic vice-presidential candidate, will not affect Harris' crypto policy.
What is Polymarket?
Polymarket is a decentralized marketplace where users can trade the results of various real-world events using cryptocurrency. It functions as a prediction marketplace platform, allowing people to buy and sell shares in the results of events such as political elections, economic indicators, sports results, and other significant events.
At the moment, the platform is gaining momentum thanks to the hype surrounding the upcoming November US election. Nick Tomaino, founder of venture capital fund 1confirmation explained the recent shifts on the platform. In particular, he responded to the community's suspicions regarding how "dark money" can influence changes in prediction markets by presenting a false trend in the election.
Some organizations, such as Arabella Advisors, have historically placed money in order to influence elections. But according to Tomaino, the dynamics at Polymarket are quite different. And it's all about the consensus on which the platform operates. It makes manipulation on the platform impossible. And speaking about the changing trend of the elections, Tomaino emphasized that significant investments can change the forecasts for a moment, but the built-in self-correction mechanisms can quickly put things back on track.
Trump's stance on cryptocurrencies
Donald Trump once called Bitcoin a scam, but now actively supports the main cryptocurrency. Over the past two years, he has invested in cryptocurrencies and earned about $1 million dollars on the sale of his NFT collections. With the start of the election campaign, he became the first candidate to accept cryptocurrency as donations and thus raised $3 million dollars. And his crypto portfolio is estimated to be worth about 8 million dollars.
For his future administration, he promised to create a powerful Bitcoin mining nation, create a Bitcoin reserve, fire Gary Gensler as SEC chairman, and commute the life sentence of Ross Ulbricht, the founder of Silk Road. Overall, Trump has been voicing a clear stance on easing regulation of cryptocurrencies, for which the cryptocurrency community has reached out to him.
Harris' stance on cryptocurrencies
Kamala Harris is the current vice president of the Biden administration, which has chosen the path of stricter regulation of cryptocurrencies. Harris is now running for the Democratic presidential nomination, and many are expecting her to take a clear stance on cryptocurrencies. While she still hasn't expressed it, the candidate's actions hint at a shift in positions. Her team has been in active contact with prominent members of the crypto industry in recent weeks.
Harris seems eager to establish a relationship with the crypto industry, but her moves are still cautious. Market participants are hoping to hear a clear stance from the Democratic candidate as early as the upcoming Crypto4Harris town meeting.
The OMFIF Digital Money Institute has openly emphasized that Harris cannot afford to cede cryptocurrencies to Trump, so she should make her stance on the industry as soon as possible. Especially when there's a rift brewing among Democrats and a fierce battle for votes in key states.
Shifting trends on Polymarket: how the crypto market behaves
At the time of writing, the Bitcoin price has fallen by 3% amid the news of Harris' dominance on Polymarket. The daily low was formed near the $57,800 mark. The market reacted with a drop, as market participants are still skeptical about Harris' crypto policy.
The market still does not trust Harris
The cryptocurrency market is closely watching the actions of regulators and expressing doubts about Harris' change of stance. The Fed took enforcement action against cryptocurrency Customers Bank, which showed Harris' insincerity in trying to mend relations with the industry.
Gemini co-founder Tyler Winklevoss took notice. He criticized the centralization of decision-making power at the Fed. Cardano founder, Charles Hoskinson joined in the remarks. He emphasized that the current administration is hostile to the crypto industry and this position has not changed. In his opinion, the choice of Harris as the next president will hurt the cryptocurrency industry.
The difference in approach was pointed out by crypto lawyer Preston Byrne, who emphasized that Trump actively engages with the crypto community, while Harris keeps aloof. And both candidates want to attract the votes of market participants.
Harris is fooling the crypto community
Former Coinbase CTO Balaji Srinivasan expressed general doubts about the transparency of the Crypto4Harris movement. He emphasized that Harris and her team are trying to garner support from the crypto community, while making no effort to change policies and trying to see if the cryptocurrency community can be lured with empty promises.
Prominent figures in the crypto industry have been looking to meet with Harris to discuss the situation regarding cryptocurrencies. At the roundtable organized specifically for this meeting, Harris never showed up. In addition, Harris' team made no commitments to the crypto community after they expressed concerns about regulatory ambiguity. Cameron Winklevoss then wryly emphasized:
"Harris is a no-show again for the latest crypto roundtable. But don’t worry, she’s really into crypto."
Conclusion
Thus, the change of sentiment on Polymarket reflects only that the participants who voted for Harris believed in her empty promises rather than a real change of stance on cryptocurrencies. And if the Democratic candidate doesn't come out with a clear stance soon, the crypto industry risks remaining under heavy regulation under the Harris administration.
Balaji Srinivasan Cameron Winklevoss Charles Hoskinson Gary Gensler Tyler Winklevoss
