FTX Token Prohibited for US Citizens
FTX has announced that it is adding a new type of futures contract, which may interest you if you are a part of the crypto community. It is called the TRUMP-2020 (TRUMP) contract, and the outcome of the upcoming US presidential election will be the deciding factor here. You might have guessed it by now that you are going to bet your money on the outcome of the election. Some people in the crypto community are interested in politics as well, and this is a great way for them to bet their money on the elections.
If Trump wins the elections of November 3, 2020, one TRUMP will expire to USD 1. However, the contract will be worth 0 if he loses. It works the same way as other futures on the exchange, which means users can go long or short based on their own estimations. The calculation of the trading fee is also simple; it will be calculated based on the base fee rates, and the price of the contract. Also, the profit and loss will be settled in USD only.
Calculating the value of TRUMP at any given moment is pretty simple; it can be understood as an expression of how likely the traders think Trump is going to with the 2020 election at any given moment. If traders are saying Trump’s victory is a 50-50 shot, TRUMP will be worth $50. The expression could change at any given moment depending on how likely Trump is to win according to the traders.
FTX Token Prohibited for US Citizens
Unfortunately, the use of TRUMP is prohibited for US citizens, which is taken comedic by some crypto traders. The use of the contract is banned in the very location where the elections are going to take place, and this determines the value of the contract. Apart from the US, it is banned in some more countries including Hong Kong, Canada, Singapore, and the UK.
When will the contract be settled?
The US presidential election on November 3, 2020, will be the key here. According to FTX, the contracts will be settled if the media networks (New York Times, 538, 270towin, Fox, and CNN) have projected a winner. It will be settled even if the final count has not been completed.
Conclusion
FTX recently launched Bitcoin options trading in January, which is also a part of a similar movement. You can expect more trading products like TRUMP in the future as the market is growing with time. As far as the TRUMP contract is concerned, it is an interesting product by FTX, and traders who are into politics are happy to see such a concept.
Prediction markets for political and other events have been around for a while now, and they have been successful as well. FTX, however, is the first derivatives market to issue a futures contract on the US presidential election, 2020. According to reports, most of the volume traded on the offer suggests that traders thing Trump is likely to win the 2020 elections.