This Week in Prediction Markets: Biden’s Decision, POPCAT’s Rise, and CrowdStrike’s Chaos

This Week in Prediction Markets

Joe Biden’s recent decision to not seek re-election is not entirely unprecedented. Historically, U.S. presidents such as James Polk and Lyndon B. Johnson have opted out of serving another term for various reasons. However, what is truly remarkable about Biden’s announcement is the timing—made just a month before the Democratic National Convention, where the party will officially select its presidential candidate. This decision comes just days after Biden reassured party supporters that the “elites” would not succeed in forcing him out of the race.

This move sparked a significant surge in betting activity on election-related contracts within the Polymarket prediction market, leading to unprecedented trading volumes on the platform. According to data from a Dashboard powered by Dune Analytics, daily trading volume exceeded a staggering $28 million, shattering previous records as bettors rushed to position themselves in a presidential race that is shaping up to be like no other in recent memory.

For context, just a month prior, the platform was averaging daily volumes of around $4 million to $5 million, following the debate between Biden and Donald Trump, which intensified calls for Biden to consider stepping down. Additionally, the number of active accounts on the platform has more than doubled over the past month, climbing to nearly 6,000 from approximately 3,000.

Moreover, bettors have pooled over $500 million in some of the largest political contracts available on the site. Specifically, the market for the U.S. presidential election winner has attracted $319 million in bets, while the contract for the Democratic nominee has seen over $212 million in investments, with Vice President Kamala Harris emerging as the overwhelming favorite. Another contract, which seeks to determine the Democratic candidate’s vice presidential running mate, has garnered $10 million in bets. Currently, the record to beat stands at $744 million, the total amount wagered on Betfair, the U.K.’s largest betting platform, during the 2020 election. With still over three and a half months until the election, one burning question remains: Will Polymarket reach $1 billion in total bets?

A Meme Coin Cat Tops $1 Billion

In an unexpected turn of events, a Polymarket contract focused on the market capitalizations of cat-themed tokens concluded on Sunday, with the Solana-based POPCAT emerging victoriously. The Polymarket question posed was: Which cat-themed meme coin would first achieve a $1 billion market value?

Back in early April, POPCAT’s prospects looked dim, with odds at a mere 2%, trailing behind competitors Keycat and Hobbes. Since its launch in March, the market accumulated $4.6 million in trading volume. Tokens from various blockchains, including Base, Ethereum, and Solana, were in contention.

However, the resolution of this contract was not without controversy. A single purchase of $630,000 reportedly triggered a price spike that pushed POPCAT over the $1 billion threshold, leading some to allege market manipulation. One Polymarket user, known as @The_Guru55, expressed skepticism, stating, “Okay, so this is interesting because that’s clearly market manipulation, but technically it did cross $1 billion on one website. Someone here with a vested interest in Popcat has manipulated the market and pushed it over.” Another commenter remarked, “Literally a one-second pump with one order on one website is pretty questionable.” As of Monday, Polymarket’s ruling that POPCAT had won stood uncontested.

The Market Misjudges the CrowdStrike Windows Snafu

In another noteworthy incident, a faulty patch released by CrowdStrike for its security software on Friday caused widespread chaos, rendering Windows computers inoperable across the globe. The disruptions began in Europe and Asia during their business hours and continued into the United States as the day unfolded.

Initially, a Polymarket contract predicted that the situation would be resolved quickly, with odds at 89% suggesting a fix would be implemented by Friday night. However, the market miscalculated. As CrowdStrike engineers published instructions for an initial fix—requiring significant effort for each affected PC—the issues escalated. Over 2,500 flights were canceled, and around 8,000 experienced delays, with Delta Airlines still in the process of rebooking passengers by Monday.

Steven Sinofsky, the former president of Microsoft’s Windows division, weighed in via social media, stating, “The scenario of any antivirus software pushing an update that behaves like this has been a ‘worst nightmare’ for two decades.” On the Polymarket platform, the “no” side of the contract—betting that a resolution wouldn’t occur by Friday—was lightly backed, with only three bettors holding a total of 45 shares, putting just over $90,000 on the line. Meanwhile, the largest holder of the “yes” side suffered a loss of $2,800.