Crypto exchange FTX has launched a range of futures contracts betting on the results of this year’s presidential election in the U.S. Traders can buy coins of Donald Trump and other candidates.
Donald Trump is no crypto fan, not even a supporter. He said, “they are not money” and believes their value is “highly volatile and based on thin air.” Whether or not he is right with those statements, we can discuss another day.
Despite his crypto-criticism, Trump still has its own coin: TrumpCoin. He didn’t launch the project by himself though, at least not to our knowledge – who knows anyway – but his supporters did, to fund his first presidential campaign.
Now that the political theater goes into the next round, crypto exchange FTX picked up on the idea and launched TRUMP token – a futures contract with which traders can bet on Trump’s election success or any of the other most promising candidates. FTX also trades futures on Bernie Sanders, Michael Bloomberg, Mayor Pete, Elizabeth Warren, and Joe Biden.
TRUMP futures: $1 if he wins, $0 if he loses
According to FTX, the token allows traders to take long positions (Trump wins) or short positions (total loser). “TRUMP expires to $1 if Donald Trump wins the 2020 U.S. presidential general election, and $0 otherwise,” FTX says in a posting on its website – the same goes for the other candidates.
In theory, the token value should track the perceived odds of a Trump victory. “If you think there’s a 52 percent chance of Trump winning, then TRUMP should trade at $0.52,” says to FTX. “Buying below there would be good, as would selling above $0.52.”
FTX also addresses potential irregularities in the general election. If the election results are unclear and President Trump refuses to the leave the office, FTX has a backup plan: “In the event that some set of electoral votes cannot be projected” – in which case it would be impossible to determine the winner – “this contract will settle to $1 if Donald Trump is still president on February 1st, 2021, and $0 otherwise.”
Traders can trade TRUMP with margin and will have to pay a fee to FTX. FTX also posts a warning on TRUMP token’s risk profile: “The risk profile of President 2020 contracts are different from BTC: they have significantly higher chances of making large moves (to $0 or $1).”
$0.62 opening price after Trump was acquitted of impeachment
This year’s election is somewhat historic: Donald Trump will be the first president to face voters following an impeachment trial. He was acquitted by the Republican-controlled U.S. Senate of impeachment articles brought by the Democratic-controlled House of Representatives.
Nevertheless, after Trump’s acquittal, the token traded at 62 cents – implying a 62 percent chance he’ll get four more years in the White House.