A “TRUMP” coin is currently selling for just under $0.63 on the crypto derivatives exchange FTX.
The coin’s premise is simple: On Election Day (November 3rd), if Donald Trump is reelected, the coin will be worth $1. If he’s not, it drops to zero.
FTX also offers coins for all the major Democratic contenders. For example, Bernie Sanders, the current Democratic frontrunner, has a coin trading at about $0.21. You can buy a Michael Bloomberg coin for just under $0.10 – a price that plummeted from more than $0.13 after his poorly received debate performance on Wednesday night.
In an interview on Venture Coinist, FTX CEO Sam Bankman-Fried says his company saw an opening in the gambling market.
“The current venues for trading these things are really clunky. As anyone who’s tried using PredictIt or Betfair or any of the other major platforms will quickly realize, these are not platforms meant to make it easy to do big trades in these things.
PredictIt has an $800 cap per person. Trying to get money in and out of these places is a big pain, and they’re not liquid. The fees are huge. You’re paying like a percent or two to get trades off.”
FTX launched the presidential coins last month, and they’ve been huge for user growth at the exchange, according to Bankman-Fried. The exchange has doubled the normal number of new sign-ups since the TRUMP coin went live.
Structured like a futures market, participants can access 2-3x margins on the coins. FTX is also looking into listing coins for other betting markets, since Bankman-Fried says their infrastructure is well-suited for online gambling.
“Obviously FTX first and foremost is a crypto derivatives exchange. More than half the volume is trading in the Bitcoin perpetual futures contract. But if you look at the core product and technology… it’s a matching engine and a risk engine… In addition to being a pricing source, it’s also a really great settlement source.
In addition to having the core technology, it also has a really easy way to move capital in and out in a flexible way. You can do dollars, stablecoins, crypto, Bitcoin. Putting all those together, it’s an easy settlement source plus matching engine plus risk engine, and that really is just sort of the core of what makes up prediction markets.”
People are also betting on the reelection via the Augur-powered Predictions.Global market.
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