Howdy!

It’s a pretty surreal moment for New York sports fans: The Yankees and Mets both won their playoff games yesterday, and the Buffalo Bills (who play in New York) defeated the New York Jets (who play in New Jersey).

Plus, the New York Liberty are two wins away from capturing their first title. I’m spreading my hope across each of these teams as a bet that one of them will bring me joy. Speaking of sports and bets:

Amateur boxing is better with prediction markets

During my first evening at Blockworks’ Permissionless conference, I engaged in a new kind of small talk fodder among crypto folk: Polymarket odds.

Infinex founder Kain Warwick had around a 70% chance to win his Karate Combat bout with David Hoffman, the Bankless podcast host roughly ten years his junior. We scoffed at the market’s confidence in a fighter on the wrong side of 40. 

Prediction markets are the crypto world’s recent fascination, and although I had written (skeptically) about them, I hadn’t watched one resolve in real time. That would all change by Friday night, as two crypto figures made their amateur boxing debuts, and crypto fans responded in the way they know best. 

The looming boxing match’s odds were a subject of conversation during the three-day event, and whispers of Warwick’s training regimen and size seemed to keep him in the lead. At the match itself though, someone next to me lamented loudly that they didn’t have a VPN on their phone. Polymarket isn’t technically available in the US, though it’s safe to assume there were a fair number of Hoffman-Warwick bettors who skirted that particular regulation.

Prediction markets currently operate in a legal gray area in the US. Although the non-crypto prediction market Kalshi won a legal victory against the CFTC earlier this month, the case is now headed to appeals. 

Following a 2022 CFTC spat of its own, Polymarket, which is the largest crypto prediction market by far, does not allow bets to come from inside the United States. Solana-based Drift also restricts US users on its BET product.

Some smaller prediction markets take the social media age verification approach to geofencing, by which I mean they ask users to self-verify that they are not in the US.

On the evening of Hoffman and Warwick’s fight, I craned my neck to see the two crypto guys exchange awkward jabs and kicks. After Hoffman landed some blows in the first round, I heard someone behind me remark that his Polymarket odds had shot up.

“I wish they would display the Polymarket odds on the screen,” the onlooker added.

When Hoffman won in a majority decision, someone near me was aghast at seeing his $250 bet on Warwick slip away. 

Walking away from the fight, I don’t feel differently about some of prediction markets’ fundamental flaws: They haven’t proven their stickiness outside of election betting, and there are better ways to trade most news events.

But I think there’s still a reasonable business case for something like Polymarket. Crypto rails can make betting markets run more smoothly, and Polymarket has a better UX than its competitors. Plus, an inclination toward decentralization could help address some of the issues in other betting markets, such as limiting successful bettors’ accounts.

And as the $65,000 bet on two non-boxers trading clumsy blows proves, the crypto world really likes to speculate. Bet against that fact at your own peril.

— Jack Kubinec

Here’s a chart that should give every Polymarket believer pause:

Internet-age presidential election cycles always tend to see a viral prediction market. As you can see, Polymarket is 2024’s version of that, with a large majority of volume going to the presidential election winner market most weeks this year.

Polymarket, with its sleek and easy-to-use interface, will certainly retain some users after the election. But with other more-legal ways to trade things like sports outcomes or rate cut decisions, it’s unclear to me if Polymarket can keep shining after its flash in the pan.

— Jack Kubinec

Grayscale, one of the largest crypto asset managers with over $60 billion in AUM, has listed JUP (Jupiter Exchange) as an asset under consideration for potential inclusion in its investment products.

Bull take:

Many in the crypto community view Grayscale’s interest in JUP as a milestone in institutional recognition that could catalyze broader adoption. @ForzaNft stated that they’ve "always been bullish for Jupiter Exchange." Others, like @MH3NFT, see the development as an encouraging sign for the future of the crypto space, commenting, "This is very promising for crypto. Love to see it!"

@PatrickHay52093 humorously urged, "Ffs, everyone ignore this tweet so the algorithm takes notice. I do not have enough JUP!" Some holders, like @b0sofweb3, suggest they are "holding [their] JUP bags tight" in anticipation of a price surge.

Bear Take:

On the other hand, critics argue that being considered by Grayscale doesn't necessarily guarantee positive outcomes. @4chachee summed up this bearish sentiment by saying, "Hate to say it, but bearish on Grayscale’s list—none of their mentioned alts are performing well afterwards."

There are also concerns over potential volatility. @TherealcryptoG expressed fear that this move could lead to a downward price, posting, "Please don't—we hate dumping." @abi69_foxxy sarcastically remarked that $JUP would stand out as "the first good token in their portfolio," hinting at skepticism about Grayscale’s existing selections.

— Jeffrey Albus

A message from Kyle DiPeppe, founder of Hedgehog Markets: