Germany faces a political crossroads as a snap election looms next month, triggered by the recent collapse of Chancellor Olaf Scholz’s coalition government. With uncertainty hanging over Europe’s largest economy, onlookers are turning to prediction markets for clues about how the German electorate might vote.
The German election represents a new test for prediction markets, which surged in prominence last fall by correctly making Donald Trump the betting favorite in the lead-up to the 2024 U.S. presidential election. They were also the first signal that Biden would drop out of the race following an abysmal debate performance.
Will they again show prescience as Germans elect 630 members to form the 21st Bundestag?
$40 million in bets on the 21st Bundestag
Polymarket, a prediction market that serves users outside of the U.S., has generated $40 million in bets on the German election so far.
The number pales in comparison to the $3.5 billion that was traded on the platform ahead of the U.S. election, but it is easily the most popular market by volume across pending global election markets, which includes Romania, Poland, Croatia, Belarus, and now Canada.
Polymarket gives the Union parties (CDU/CSU), led by Friedrich Merz, a 90% chance of winning the election, which will be held on Feb. 25, seven months ahead of its original scheduled date.
The forecast matches up with other prediction markets that have lower trading volume on the question, like Kalshi (89%) and Manifold (89%). Metaculus, a different type of prediction platform, is even more bullish for the CDU/CSU, giving them a 95% chance of heading the German government.
German polls also show Christian Democrats (CDU/CSU) leading with support from 31% of voters, the far-right Alternative for Germany party (AfD) in second place with 20% and Social Democrats (SPD) in third place with 16% as of Jan. 6.
Polls, however, are not forecasts or probabilities. Prediction markets, by contrast, aggregate the insights of traders who have financial incentives to be accurate.
Polling data are priced into prediction market forecasts, along with a smorgasbord of other information, as market mechanisms account for a wide array of factors that traditional polling might overlook.
What prediction markets are saying about Germany
Prediction markets are forecasting more than who will simply win the Germany election. They are providing real-time forecasts for exactly how each of the competing parties, including the controversial AfD, will perform, in addition to questions related to the economy and whether Trump will visit Germany when he takes office.
Here’s a look at some of the current markets across various platforms.
- 60% – The Grand Coalition, consisting of the CDU/CSU and the SPD, makes up the ministerial and cabinet-level positions of the new government.
- 80% – AfD wins the second-most seats.
- 51% – AfD gets 20-25 percent of the vote.
- 55% – Germany will have a recession before 2027.
- 55% – Trump will visit Germany during his first year back in office.
- 18% – The Left will make it into Bundestag as a Fraktion.
The Musk effect
Though the AfD is a longshot to upset the CDU/CSU, they do have the endorsement of Elon Musk, who helped spearhead Trump’s presidential victory.
On Friday, Dec. 20, Musk posted on X (formerly Twitter), “Only the AfD can save Germany.”
Only the AfD can save Germany https://t.co/Afu0ea1Fvt
— Elon Musk (@elonmusk) December 20, 2024
Traders took notice, as the AfD’s trading price to win the election more than tripled in value, soaring from just 4¢ to as high as 14¢ on Polymarket that weekend.

For those unfamiliar, prediction market prices are typically between 1-99¢ and pay out $1. The price of a “share” reflects the probability of an event occurring. In this case, the rise in the AfD’s price translated to a perceived 14% chance of winning the election.
The AfD’s price has since reverted to 8¢, and Musk’s endorsement has had little impact in the polls, as the AfD was already polling around 19% before the tech mogul’s post.
These price changes highlight how prediction markets dynamically react to breaking news, offering a real-time gauge of shifting probabilities.
What's next
As Germany prepares for its pivotal election, prediction markets will continue to play a vital role in tracking public opinion and gauging the impact of campaign developments and current events. While they are not infallible, their ability to aggregate diverse inputs and provide real-time insights makes them an increasingly valuable tool for anyone interested in knowing what the future holds.
Regardless of the outcome, the results of this election will have far-reaching consequences for Germany’s economy, its role in the European Union, and global markets. Prediction markets offer a lens to better understand these dynamics as they unfold—one price change at a time.