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Prediction Markets Like Polymarket Deemed a ‘Public Good,’ More Accurate Than Polls
Prediction markets, such as Kalshi and Polymarket, are gaining attention for their potential to offer more accurate insights into public sentiment than traditional polls, despite concerns about their impact on democracy. Supporters argue these markets serve as a public good by aggregating diverse information and providing a reliable forecast, while detractors warn of risks like manipulation and the commercialization of elections. The U.S. Commodity Futures Trading Commission (CFTC) has attempted to restrict election betting markets, citing concerns over manipulation, but recent legal decisions have allowed platforms like Kalshi to continue operating. Prediction markets, like Polymarket, are seen as effective tools for hedging risks and providing better accuracy due to economic incentives for informed participants. However, critics highlight ethical concerns and the potential to undermine public trust in democratic processes by reducing elections to financial transactions.
Europe Not a Priority for Sam Altman’s Worldcoin, Executive Says
Worldcoin, the digital identity project co-founded by OpenAI's Sam Altman, is shifting its focus away from Europe to regions like Asia-Pacific (APAC) and Latin America (LATAM), where governments are more open to emerging technologies, according to Worldcoin executive Fabian Bodensteiner. Speaking at the Sifted Summit, Bodensteiner highlighted stronger market dynamics in countries like Japan, Malaysia, and Argentina. Worldcoin is collaborating with local businesses and game publishers in these regions to promote its "World ID" technology. Despite challenges in Europe, including regulatory scrutiny over biometric data collection, the company remains committed to working with European regulators and continues its operations in countries like Poland and Austria.
WEF Supports 'Sandbox-First Approach' for Accelerating DeFi Adoption
The World Economic Forum (WEF) has recommended that regulators adopt a "sandbox-first approach" to support decentralized finance (DeFi) innovation while managing risks. In its assessment of nine major economies, including the U.S., U.K., and Japan, the WEF highlighted the benefits of regulatory sandboxes, where DeFi experiments can be conducted within controlled environments to ensure transparency and mitigate risks. The report noted that only a few jurisdictions, like the U.K. and Singapore, are developing tailored DeFi regulations. The WEF stressed the importance of collaboration between regulators and DeFi platforms to protect consumers and promote innovation.
Trading Desk Insights
Bitcoin recently approached $64,000 in anticipation of significant economic data releases from the U.S., only to retreat to $62,500 earlier today. The resurgence in Chinese equity markets, buoyed by recent economic stimulus measures, appears to be temporarily diverting capital away from the cryptocurrency sector. Nonetheless, this shift might not persist. Current market sentiment reflects an expectation for a 50 basis point reduction in interest rates by year's end, a decrease from last week's forecast of 75 basis points.
Over the weekend, interest in memecoins surged, driven by heightened social media buzz and increased appetite for risk among cryptocurrency traders. Notably, discussions about a potential "memecoin supercycle" have gained traction online, with cat-themed cryptocurrencies outpacing their canine counterparts as the favored speculative assets.
Meanwhile, Tokyo's Metaplanet has expanded its Bitcoin holdings by an additional $6.7 million, bringing its total to 639.5 BTC, valued at approximately $40.6 million. In regulatory news, the UAE has aligned cryptocurrencies with traditional financial services by exempting them from value-added tax (VAT).
In the realm of cryptocurrency ETFs, Bitcoin ETFs saw inflows of $25.6 million, predominantly led by Bitwise, while Ethereum ETFs recorded $7.4 million in inflows, primarily from Blackrock.
In political markets, Donald Trump has extended his lead over Kamala Harris on Polymarket following an endorsement from Elon Musk, despite lagging in several pivotal states.
U.S. stock futures declined on Monday, challenging the market's attempt to extend the previous Friday's rally. The averages are coming off their fourth consecutive winning week, supported by a robust jobs report that bolstered hopes for a gradual economic deceleration without triggering a recession.
The 10-year Treasury yield crossed back above 4% for the first time since early August, propelled by strong labor market data, even as the Federal Reserve has reduced interest rates. On the commodities front, U.S. crude oil prices increased roughly 2% amidst expectations of an Israeli military action against Iran, which could potentially disrupt the critical Strait of Hormuz, through which 20% of global crude exports pass. This geopolitical tension, alongside China's stimulus efforts, is reigniting concerns about inflation, possibly prompting a shift from bonds to other assets.
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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