Polymarket’s open interest falls off a cliff
Quick Take
- Polymarket saw the largest single-day drawdown in open interest in its history last week.
- The following is an excerpt from The Block’s Data and Insights newsletter.
Polymarket suffered its largest single-day drawdown in open interest last week, losing $20.9 million. On Monday, August 5, Polymarket's open interest stood at $90.3 million, but this figure fell by 28.4% the following day, equivalent to approximately $25.7 million.
Notably, this follows last week's record-breaking performance for Polymarket, which saw its highest-ever monthly volume, user engagement, and OI figures.
Several factors may have contributed to this sudden drop in Polymarket's OI.
The most probable reason could be the broader market downturn on Monday. This may have prompted Polymarket bettors to liquidate their positions and seek refuge in stablecoins, mirroring behavior seen in other crypto markets during periods of uncertainty.
Another reason may be due to the end of the Olympic Games likely led to the closure and settlement of numerous Olympic-related markets on the platform. As these markets conclude, the associated open interest naturally decreases. However, this is the least likely reason, as the drop in Polymarket OI occurred on Monday while the Olympics ended on Saturday.
The last reason may be that the odds of Kamala Harris winning the presidential election now surpass Donald Trump's. This shift could have incentivized early bettors on Trump's "YES" position to take profits, potentially contributing to the OI decrease. However, it's important to note that this is purely speculative and would require further data to confirm its impact on the overall OI.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.
Correction (Monday, Aug. 12, 20:55 UTC): Polymarket's open interest was at $90.3 million on Monday.
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