Who would’ve guessed that an offshore political betting market relying upon cryptocurrency deposits is riddled with issues?
Three months ago, we at RDP wrote about the need for more skepticism in regards to political betting markets and their predictive abilities. Now reporting is showing that the markets may not be so predictive afterall, with Fortune reporting that a huge percentage of trades on Polymarket show signs of “wash trading,” a form of market manipulation. Reporting has also shown that a single French gambler, who’s full identity remains unknown, is responsible for $45 million in bets on Trump winning the election, alone representing over 2% of the entire market.
It’s not really surprising that fans of Donald Trump—some of whom have a messianic view of him so much that they have been willing to invest millions into nearly-worthless Iraqi Dinars or attempt a coup—would extend their illogical behavior to offshore betting markets, influencing the odds in his favor. Nor should it be surprising that a platform reliant on cryptocurrency backing (an industry with a history of investment boom-bust cycles dependent on memes) would attract dumb money.
Despite this, Polymarket has somehow continued to be cited as if it were insightful. Why? Because decades of neoliberal thought have valorized anything that can be described as a “market,” while underrating the need for market regulation. The result of this untamed market? An unreliable system easy to manipulate. Perhaps tomorrow will lead people to reevaluate that, but it sure won’t lead them to apologize for citing it as a real source of information.
We, on the other hand, will continue to believe that markets only function well with guardrails (e.g., antirust, transparency laws, etc) that protect people from rapaciousness or stupidity.