In the US, $3,500 may be enough to move prices on election prediction markets — CNBC
In the United States, a $3,500 bet can move the price by at least five cents in 97% of prediction markets related to the midterm elections. This is stated in a study by the Anti-Corruption Data Collective, as reported by CNBC. The report’s authors believe such trades may create the impression of growing support for a candidate.
The cost of moving a price
Researchers analyzed 1,094 markets where contract prices were five cents or lower. According to their data, in 806 of them, spending less than $100 was enough to move the price by five cents. A bet of up to $1,000 could move the price by 10 cents in 94% of markets, while in most markets a $25,000 bet could shift the price by 25 cents.
Prediction markets have gained popularity ahead of the November midterm elections in the United States. Kalshi and Polymarket offer users “yes” or “no” contracts on possible events. Unlike opinion polls, which capture the views or intentions of a sample of respondents, such platforms allow participants to trade contracts on possible outcomes.
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Examples from the Texas primaries
The Anti-Corruption Data Collective also recorded 353 cases on Polymarket during the current election cycle in which one or two wallets moved a contract price by at least five cents. In 211 cases, the price remained at the new level; in 62, it continued to move; and in another 80, it returned to its original value.
In particular, in December, one wallet bet $1,760 on Polymarket, after which the price of a contract on Texas Attorney General Ken Paxton’s victory fell from 55 to 50 cents. Paxton later became the Republican Party candidate. Fourteen hours later, another wallet bet $1,240, raising the price from 52 to 63 cents.
On February 7, two wallets spent $23,953, raising the price of a contract on the victory of Texas U.S. House Representative Wesley Hunt by 10 cents. Over the next two hours, another wallet spent $38,830 and lowered the price of Paxton’s contract by eight cents. The report’s authors noted that such large trades, which later contradicted polls, political dynamics, and the outcome, may indicate an intention to influence the market. At the same time, they suggested that these could have been risky bets by traders.
