Binance Co-owned FTX Adds TRUMP-2020 Futures Market
Some members in the crypto community take their interest in politics further than others and seem willing to bet money on the outcome of elections, a new product from crypto derivatives exchange FTX suggests.
While keeping up with what happens with the most traded digital assets is enough for most, some seemingly can’t get enough of trading – constantly searching for new opportunities to make money from their unique insights.
To respond to the demand for ever-more innovative trading products, FTX announced that it is adding an entirely new type of futures contract on its platform, namely the TRUMP-2020 (TRUMP) contract. And as you might have guessed, the point here is to bet money on the outcome of the upcoming U.S. presidential election.
According to FTX, one TRUMP expires to USD 1 if Trump wins the 2020 U.S. presidential election on November 3, 2020. If he loses, the contract will be worth 0.
The terms of the contract also stipulate that if media networks – meaning The New York Times, 538, 270towin, Fox, and CNN – have projected that one of the candidates has won, the contracts will be settled, even if the final count has not been completed.
The price of the TRUMP contract will reportedly float in the market to constantly represent the likelihood that Trump wins. In other words, if the market believes there is a 52% probability that Trump wins, the price of each contract will be USD 0.52, FTX explained in its announcement. At pixel time (10:49 UTC), the price is USD 0.62
The announcement is perhaps particularly interesting because the price of the contract may turn out to be a reliable predictor of the result of the election, assuming the market becomes reasonably liquid.
Although so-called prediction markets for political and other types of events have already been around for a while on platforms like Augur (REP), FTX, which is co-owned by Binance, is seemingly the first derivatives market to issue a futures contract on the 2020 U.S. election.