Two beautiful stories in here yesterday:
Khamenei/Iran and Kalshi's lawyered war bets:Khamenei/Iran and Kalshi's lawyered war bets:
You'd think the many Kalshi bets about "Khamenei out as leader" etc included or would have solved in favor of a) him dying, b) him dying by bombs. Alas, no. Wars not approved betting on Kalshi:
If you think that you are getting a wink-wink bet on a prohibited subject, most of what you are getting is not the clean bet you wanted (Khamenei “out”) but rather a fuzzy and unpredictable bet on legality and resolution mechanisms.
Resolution mechanism and specification matters more than anything else...
Polymarket, meanwhile, has a bifurcated structure with US and technically-non-US markets, so it has no problem listing quite explicit war contracts, and its “Khamenei out as Supreme Leader of Iran by March 31” contract traded to 99.9%. Straightforward.
"Apparently the lesson everyone has learned from the rise of prediction markets is that all-or-nothing bets are more appealing than linear bets, so big traditional firms are racing to launch them.""Apparently the lesson everyone has learned from the rise of prediction markets is that all-or-nothing bets are more appealing than linear bets, so big traditional firms are racing to launch them."
Discounts on Bitcoin Treasury CompaniesDiscounts on Bitcoin Treasury Companies
Markets are reasonably efficient, so shares in a company that contains obviously/moment-by-moment valued bitcoin should trade at the value of the bitcoin represented by that share. Anything else, said corporate finance textbooks and common sense prior to the Paper Bitcoin Summer of 2025 (#1217842), would be madness and prime candidates for arbitrage trades.
Alas, shit happened and madness ensued and on account of that we have 200 publicly traded companies holding bitcoin -- most trading well below the value of the bitcoin inside of them. Obvious trade: buy up the company, force it to sell the coins and close up shop.
Levine, and yours truly, has been on this hunt for a while:
Financialization is bad; bitcoin financialization is doubly bad. (#1291642)
The 4,081 BTC held by Empery (mNAV = 0.59) is violently fought over: a bunch of people nominated for the seats on Empery's board by various activist shareholders, at least two activist firms buying up parts of the company, pushing it to be stripped for its (more valuable) parts
"If there’s a discounted pot of Bitcoins, it turns out a lot of people will want to get control over it""If there’s a discounted pot of Bitcoins, it turns out a lot of people will want to get control over it"
At least some of the ~1.1M BTC held by corporates and institutions will be returned to the plebs!
Love to see it.
Shouldn't there be at least some discount (representing the cost of forcing the company to sell it's bitcoin at market prices and the risk that something goes wrong in that process) on the bitcoin held by a treasury company? So it makes sense that a lot of the treasury companies are valued at less than the value of their holdings -- I'm sure some of the people who know how to do things with statistics could tell us pretty closely what this appropriate discount is.
true, true. I mean, if they were (briefly) trading at 0.98 of their holding the arbitrage/spin-off wouldn't be worth it -- in part for the reasons you highlight.
But some of them, quite a lot of them, are trading in the 0.5-0.7 range. That gives plenty of leeway... or margin of safety as Mr. Buffett himself would have said
The Kalshi thing isn’t as bad as I thought. If I understood correctly, they just paid out at 99.9 instead of 100.
Oh really?
I got the impression that that was Polymarket's number
You’re probably right. I just meant that it’s a lot better than resolving it the “wrong” way.
true true true... kind of defeats the purpose of a bet/prediction market to resolve a bet to its pre-conclusion price
introducing war as gambling entertainment for the masses is an effort to distribute the karmic consequences; as long as the horror is approved by the collective... it shall be done to the collective;