Trump has taken the lead in online prediction markets such as PredictIt and Polymarket. Polymarket last favored him 61% to 39% over Harris.
Trump’s gains on Polymarket might stem from a group of four Polymarket accounts that have collectively spent about $30 million worth of cryptocurrency on bets that he will win, the Wall Street Journal reported on Friday. Polymarket did not immediately respond to a request for comment.
“Some of this certainly could be being driven by Trump’s improved position in the predictive markets,” said Steve Sosnick, chief strategist at Interactive Brokers.
Due to strong economic data, however, “it’s really hard to separate cause from effect, much less separate different causes,” he said.
Shares are up more than 140% since Sept. 23.
“It’s the trade that is most levered to Trump’s election prospects,” Sosnick said.
In foreign-exchange markets, Trump trades are visible in the dollar’s rebound against a range of currencies, particularly the Mexican peso, strategists said.
“Implied volatility in the dollar-peso pair has been ratcheting up in line with Trump’s gains in betting markets,” said Karl Schamotta, chief market strategist at payments company Corpay in Toronto.
The former president’s economic policies are seen as growth-friendly and a catalyst for inflation, two factors that could translate to higher Treasury yields, which move inversely to bond prices, and a stronger dollar.
The dollar index , which measures the greenback’s strength against six major currencies, has risen more than 3% since late September, as investors price in a shallower trajectory for interest-rate cuts. Some of its gains, however, are likely related to greater confidence of a Trump win, wrote Thierry Wizman, global FX & rates strategist at Macquarie.
Improved betting-market odds for Trump, who has positioned himself as pro-cryptocurrency, appear to be lifting bitcoin. The world’s largest cryptocurrency is up 12% since Oct. 10, a rally that Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors, attributed to rising confidence in a Trump victory.
“If Trump secures a second term, the regulatory-risk-driven discount applied to crypto would likely shrink to near-zero, and investors would need to price in the possibility, however small, of the government adopting a strategic bitcoin reserve,” he said.
A New York Fed gauge measuring term premium turned positive last week for the first time since July. The move has come amid a broader rise in Treasury yields.
Part of the reason for those moves are expectations of a Trump win, said Matt Eagan, portfolio manager and head of the full discretion team at Loomis, Sayles & Company.
Still, not everyone interprets these market moves as bets on a Trump victory.
“I think the election mostly remains as a toss-up,” said Sonu Varghese, global macro strategist at Carson Group. “The story is really one of stronger economic growth and a supportive Fed.”
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Reporting by Saqib Iqbal Ahmed and Suzanne McGee; Additional reporting by Lewis Krauskopf, Michelle Conlin and Davide Barbuscia; Editing by Ira Iosebashvili and Rod Nickel
Our Standards: The Thomson Reuters Trust Principles.
