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Price prediction markets

Make informed bets on cryptocurrency prices & win on Polymarket by using the Almanak's Price Simulator.

Polymarket primer​

Polymarket is a decentralized prediction market platform that enables users to bet on the outcomes of various real-world events using cryptocurrency. The platform features a wide range of markets, including political elections, sports outcomes, and crypto economic indicators.

Most importantly, polymarket regularly hosts prediction markets for crypto prices for main assets such as BTC, ETH and SOL. Markets differ by duration, some run weekly, some run the entire year. Market’s also slightly differ how the price bet is frames: reaching above floor price at target deadline, reaching all-time-high within target period or which quarter does the asset reach all time high within 2024? Short term: Asset price is above X$ on the day of the deadline?- yes/no Medium: Asset price achieves all time high in month deadline month? - yes/no Longer term: When does asset price reach all time high [within the year]? - Q1, Q2, Q3, Q4

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Note: the price for betting on an outcome depends on the current dominating market sentiment (ratio of existing bets on yes vs no) - the outcome deemed more likely is more expensive, the outcome deemed less likely is more cheap - the sum of the two bets is always equal to the payout = 1$.

Short guide​

  1. Search Polymarket for crypto price prediction markets
  2. Write down list of assets & prediction target dates
  3. For each asset, determine inputs for the simulator Simulation Date Range: now until prediction market’s resolution date Historical (Training) Date Range: based on length of simulation date range: short, medium, long term Interval: based on granularity of market’s resolution date Market Scenario: based on asset & historical date range Volatility: based on asset & historical date range Drift: based on asset & historical date range Trajectories: set to maximum (50)
  4. Run the Almanak Simulator for each asset & target date, explore results
  5. Place bets

Step by step guide with example​

  1. Search Polymarket for crypto price prediction markets.

  2. Select a market, note down asset pair & resolution (target) date including granularity. In this case, we selected the following weekly market: Will Ethereum be above $2500 on August 30?

Asset pair is ETH - USDT and resolution date & time is 30 Aug 2024, 12:00 ET.

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  1. Determining & calculating the inputs for the simulator - 1 month training

Simulation Date Range: 27.08.2024 (today) - 30 Aug 2024 (market resolution date) Note: 4 days

Historical (Training) Date Range: 26.07.2024 (today-1 months) - 26.08.2024 (today-1) Note 30 days

Interval: Hour (as market resolution time is intraday, 12:00 ET)

Market Scenario: Range-bound

Volatility: 4.19% (last 30 day) / (30)^0.5 x (4)^0.5

Drift: no drift in range-bound market scenario

Trajectories: set to maximum (50)

  1. Run the Almanak Simulator, explore results. Count the number of trajectories with prices above & below $2500 to yield probabilites. Based on the estimated probabilites and your risk tolerance, make bets on Polymarket. alt text