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Analysis: Prediction Markets Have a Gambling Problem

Prediction market platforms Polymarket and Kalshi spend a lot of time and money convincing regulators they’re not gambling.
Outside of the U.S. authorities are viewing prediction markets as synonymous with gambling. Taiwan, France, and now Singapore have all made moves to block users from accessing Polymarket at the ISP level, calling the prediction market platform an unlicensed gambling operation of some sort.
Prediction markets are investment tools, where traders take a position on the outcome to a question.
Parties and counter-parties have differing opinions on how to price the the competing sides of the question, and the market engages in price discovery. Should the event occur, each share will be worth $1, or $0 if the event fails to materialize.
This isn’t a game of chance. Prediction markets aren’t considered gambling (in the U.S.) because they are designed as tools for forecasting outcomes based on probabilities, rather than games of luck. The house doesn’t set the odds, or win. It’s all about market participants.
In the U.S., the Commodities Futures Trading Commission views its role as regulating prediction markets because it views the markets as a collection of event contracts, similar to weather derivatives – not a new invention – used by farmers to hedge against crop loss by buying into contracts that pay out in the event of freak weather. Climate change has made this a lucrative field.
Both Polymarket and Kalshi have had their own fights with the CFTC. Polymarket settled, Kalshi won. Kalshi, as a result, now has permission to offer election-based event contracts; Polymarket must block U.S. users from accessing its platform. Kalshi also now has Donald Trump Jnr. as an advisor, helping its case with regulators.
Election-based event contracts were a big business during the 2024 election. Looking back at how the market responded to Donald Trump’s eventual victory, you can see them as financial instruments to prepare for a post-election market.
Considering bitcoin’s “Trump Bump,” a significant price correction might be expected if his rival Kamala Harris won, thus crypto traders would want to hedge their holdings with prediction market positions.
Polymarket’s naysayers bet wrongly about the platform’s demise post-election. Data showed that by all accounts the platform was doing just fine after the election: $1.6 billion in monthly volume.
But a lot of this volume comes from sports themed prediction market contracts. Data from Polymarket Analytics shows that there’s currently over $1.1 billion in volume bet on the outcome of the NFL Super Bowl; $740 million on the outcome of the Champion’s League; and $700 million on the winner of the NBA Finals.
There is no macro-level importance to the outcome of a sports event. Unlike an election, a war, or a decision by a Fortune 500 company to acquire a rival (or add bitcoin to its balance sheet), there are no broader financial or societal consequences to the outcome of the NFL Super Bowl.
In other words, this looks a lot like online sports betting, which took a herculean effort to legalize and has its own set of stringent licensing requirements. Online gaming operators spent a considerable sum establishing – and legalizing – this market, with traditional casinos like MGM playing catch-up.
In jurisdictions like Singapore which have online, licensed sportsbooks that offer sports betting, the case it clear to instigate a ban. In the U.S., state-level gaming regulators might be the next to take a look, perhaps prompted by online sports gaming giants that legalized an industry that was once banned.
That’s not to say there isn’t room for sports-themed prediction market contracts.
The NFL’s broadcasting rights are worth over $100 billion and streamers like Amazon and Netflix are trying to get in on sports, which makes prediction market contracts about NFL ratings, for example, a useful tool for equity holders of media companies to determine if an investment into broadcast rights was worth it.
The possibilities are endless.
Or, maybe Polymarket should just move to Canada, as Ontario allows both political and sports betting. Sometimes the smartest bet is on a change of scenery, and there’s not a prediction market for that.
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Tesla Reports $951M in Crypto Holdings as it Misses Earnings

Tesla (TSLA) still holds almost $1 billion in bitcoin, according to the automaker’s latest earnings report.
The electric vehicle firm reported digital asset holdings worth $951 million as of March 31, down from $1.076 billion on Dec. 30. Tesla currently holds 11,509 bitcoin in its balance sheet, according to Bitcoin Treasuries data.
The change is almost certainly due to bitcoin’s price depreciating between the two quarters. Data from Arkham Intelligence indicates that Tesla did not perform any transactions in the last three months. Arkham marks Tesla’s holdings as being currently worth $1.049 billion.
A new rule from the Financial Accounting Standards Board (FASB) requires corporate holders of digital assets to begin marking those assets to market each quarter.
Tesla also reported $19.34 billion in revenue for the first quarter of the year; analysts had expected the carmaker to rake in $21.37 billion.
The TSLA shares were up more than 2% in after-hours trading.
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Bitcoin Tops $91K as Trade Optimism Fuels Crypto Rally But Demand Headwinds Remain

Bitcoin (BTC) surged past $91,000 on Tuesday, climbing nearly 5% amid renewed investor optimism and fresh hopes of a thaw in U.S.-China trade tensions, but headwinds persist that could cap further upside, analytics firm CryptoQuant cautioned.
The largest crypto by market capitalization hit $91,700 in the U.S. afternoon, its strongest price since early March. Altcoins followed BTC higher, with Ethereum’s ether (ETH) rising 8% over the past 24 hours above $1,700, and dogecoin (DOGE) and Sui’s native token (SUI) gaining 8.6% and 11.7%, respectively. The broad-market crypto benchmark CoinDesk 20 Index advanced 5.2%.
Markets were buoyed by remarks from U.S. Treasury Secretary Scott Bessent, who reportedly told investors at a closed-door JPMorgan event that the tariff standoff with China was unsustainable. Bessent said de-escalation would come “in the very near future,” characterizing current conditions as a “trade embargo.” However, he cautioned that a more comprehensive deal between the two nations could take even years.
Stocks recovered from yesterday’s decline, with the S&P 500 and the tech-heavy Nasdaq finishing the session 2.5% and 2.7% higher, respectively. Gold, meanwhile, sharply reversed from its record price of $3,500 during the day and was down 1%.
«As capital rotates into safe-haven and inflation-hedging assets, BTC and gold are proving to be key beneficiaries of the exodus from USD risk,» analysts at hedge fund QCP Capital said in a Telegram broadcast.
They highlighted rejuvenating inflows to spot U.S.-listed BTC ETFs and the return of the so-called Coinbase price premium, suggesting demand from American institutional investors. BTC ETF booked over $381 million net inflows on Monday adding to Thursday’s $107 million, according to Farside Investors data.
But not all signs point to a sustained breakout.
Despite the price jump, on-chain data points to fragility beneath the surface, CryptoQuant analysts said in a Tuesday report. Bitcoin’s apparent demand has decreased by 146,000 BTC over the past 30 days—an improvement from the sharp drop in March, but still negative. CryptoQuant’s demand momentum metric, which tracks new investor interest, has deteriorated further to its the most bearish level since October 2024, the report noted.
Market liquidity remains soft, with the report using USDT’s market cap growth as a proxy for crypto liquidity. USDT grew $2.9 billion over the past two months, below its 30-day average. Historically, BTC rallies coincided with USDT growth above $5 billion and above trend — a threshold not yet met.
Adding to the caution, bitcoin is now facing a key resistance zone between $91,000 and $92,000 at around the «Trader’s On-chain Realized Price» metric, a level that has often served as resistance in bearish conditions. CryptoQuant’s on-chain bull score classified current market conditions as bearish, suggesting a pause or pullback could follow if sentiment weakens.
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Unicoin CEO Rejects SEC’s Attempt to Settle Enforcement Probe

Unicoin has rebuffed the U.S. Securities and Exchange Commission’s (SEC) attempt to negotiate a settlement agreement to close an ongoing probe into the Miami-based crypto company, its CEO Alex Konanykhin revealed in a Tuesday letter to investors.
In his letter, Konanykhin said Unicoin was given an “ultimatum” by the SEC to attend a settlement negotiation meeting last week, on April 18.
“We declined to show up,” Konanykhin told CoinDesk, adding that the SEC had made demands ahead of the meeting that he found “unacceptable.” He declined to share specifics, telling CoinDesk that the communication between Unicoin’s lawyers and the SEC was confidential.
Unicoin received a Wells notice — a sort of official heads-up from the SEC that it intends to file an enforcement action against the recipient — in December, shortly before former Chair Gary Gensler stepped down, alleging violations related to fraud, deceptive practices, and the offer and sale of unregistered securities. No official enforcement action has yet been filed.
Since President Donald Trump took office, the SEC has reversed its once-aggressive stance toward crypto regulation, backing off from many of its open investigations into crypto companies, including blockchain gaming firm Immutable and non-fungible token (NFT) marketplace OpenSea, and even some of its ongoing litigation, including against Coinbase and Cumberland DRW.
Other SEC enforcement cases against crypto companies, including its cases against Binance and Tron, have been paused while the parties attempt to negotiate a settlement. The agency recently reached a settlement agreement with Nova Labs, the parent company behind the Helium blockchain, that saw Nova Labs pay a $200,000 fine to settle civil securities fraud charges, and the SEC dropped its claims that Helium (HNT) and other related tokens were securities.
In his letter to investors, Konanykhin claimed that the SEC’s probe has caused “multi-billion-dollar damage” to the company and its investors.
“We would likely be a $10B+ publicly traded company by now if the SEC had not blocked our ICO, stock exchange listing and fundraising,” Konanykhin wrote, adding that the SEC had prevented Unicoin from acting on the “very favorable market opportunities.”
“We were forced into a standstill,” Konanykhin wrote.
The SEC did not respond to a request for comment.
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