The Pomp Podcast - Wall Street Gives Brutal Credit Rating To Strategy Over Bitcoin

Episode Date: October 29, 2025

Jeff Park is the Partner and Chief Investment Officer at ProCap BTC. In this conversation, we unpack why Strategy securing a credit rating marks a major milestone for Bitcoin adoption. Jeff breaks down what it means for corporate balance sheets, the upcoming Solana staking ETF, and how prediction markets are shaping global narratives — including the wild debate over whether Donald Trump might actually be Satoshi.======================Check out my NEW show for daily bite-sized breakdowns of the biggest stories in finance, technology, and politics: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://pompdesk.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠======================⁠BitcoinIRA⁠: Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to ⁠https://bitcoinira.com/pomp/⁠ to earn up to $500 in rewards.======================Core is the leading Bitcoin scaling solution, enabling you to lock in yield by locking up your Bitcoin. Simply lock it on the Bitcoin blockchain to secure the Core network, and get rewards. No bridging. No lending. Just holding. Still your keys. Still your coins. Now your yield. Start at ⁠https://stake.coredao.org/pomp⁠======================Timestamps: 0:00 - Intro1:58 - Importance of Strategy getting a credit rating 7:25 – What matters more: the logic or the rating itself?14:14 - How investors can make money on this19:41 - Solana staking ETFs enter the market25:12 – How traditional firms will handle staking31:47 – Prediction markets and Donald Trump being Satoshi?37:11 - New York City mayoral election odds45:52 – Coinbase’s UpOnly Podcast NFT and grabbing attention

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat

any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. This is what they're telling you. We think this is a bad business idea because your equity is negative based on our RACC framework that Bitcoin is on your balance sheet. But two, it seems like lots of people really like your stuff and your liquidity is super high, which we love. So now we're going to give you a boost back up and give you points for that. But third, like, let's not do that. You tweeted a fantastic market, which I think has currently 65% chance that Donald Trump is Satoshi Nakamoto. Do you believe that?

What's going on, guys? Today, we've got a great episode with Jeff Park. Jeff is the chief investment officer of ProCap BTC. And in this conversation, we talk about strategy, getting a credit rating. This is a huge deal for the industry, and Jeff's going to break it down for us. We also talk about the Solana staking ETF that's launching. And then we get into prediction markets and whether Donald Trump is Satoshi and why the world is moving so quickly. You can see this across financial markets, politics, and social media.

This conversation is a lot of fun. And we unpack some things that you're probably thinking about at home. Here's my latest conversation with Jeff Park. All right, Jeff, a great place to start the conversation. Strategy finally got the credit rating that they were looking for. Came in as a B minus,

which I think was a little surprising to people. But talk about maybe the importance of getting the credit rating. And then you had some great takes on why B minus may not be the rating that you would have given them. Absolutely. Well, first of all, I think it's so funny when you read the report and you realize there are so many things about it that hint towards the lack of compatibility with the Bitcoin business model that strategy is pursuing and the insurance framework that B-minus itself just feels a little random.

Like, why B-minus? Sounds like from all the reasons, it might have been a C. And I thought maybe it's B-minus because it's Bitcoin to be continued. That was a clever way to make a nod at it. But all kidding aside, look, I'm very happy for strategy. I know it's been something the Saylor team have been working on for a long time, and we owe them a ton of gratitude for pushing the industry forward because insurance is the holy grail of capital costs, to which I think Bitcoin serves a really useful role as a very long duration asset, which is exactly what insurance should be pursuing. um but at the same time rating agencies are uh growing and changing and fallible and you know there's a wonderful quote from warren buffett actually back in 2008 when in his annual shareholder

rotor he said ratings agencies are a prime example of people who don't know what they don't know and everyone trusts them anyway uh and there's a certain truth to that and i think the strategy research report shows you exactly what those gaps are so i'll point out a couple things um and we can double click on which ones you think are most interesting. The most glaring aspect of it that I think most asset owners would recognize makes strategy very challenging to grade in the credit model that insurance companies are used to is the concept of RAC, risk adjusted capital. So risk adjusted capital is important because it is trying to assign a quality grade to assets to which there's bifurcation between good assets and bad assets. And it's a little bit of a combination

of the Basel framework. It's a little bit of the OCC and FDIC with the Fed. It's a little bit of NAIC. And it's all of these bodies combined trying to think of what are assets ultimately worth and how can we penalize or reward good assets versus bad assets. The two parameters that tend to dictate this, which wouldn't surprise anyone who's been following crypto, is liquidity and volatility. So if it's very illiquid, you get pinged. And if it's very volatile, you also get pinged. So Bitcoin sits in this really strange medium where we know it's volatile, but we also know it's very liquid. And again, as we've talked about before, those two things don't generally come hand in hand. It's usually very volatile because it's really illiquid or something

that's really liquid tends to be very not volatile. So Bitcoin's a corner case. And so what happens is that to calculate the RAC ratio, you take the risk adjusted capital, you divide it by the risk weighted assets. And the problem that strategy has faced is that the S&P has determined that their risk adjusted capital is negative. It's actually not just even a small number, it's negative. And the reason it's negative is because you took the equity value and you subtracted all of the Bitcoin assets and therefore flipped it into a negative territory. They subtracted Bitcoin because they classify Bitcoin as intangible assets. And a certain category of intangible assets can also be called non-capital assets.

And generally, those classifications are used for things like goodwill, right? So if you have goodwill on your balance sheet through mergers and acquisitions, very hard to put value on it. Of course, it's really illiquid. You can't trade intangible assets of that kind. So you have to take it back out of the equity, which I think is fair. But it's not fair to call Bitcoin goodwill. That's essentially what they're doing. Because Bitcoin, as we know, has value, it has liquidity, and it has all the features of what should be more treated as a way collateral is otherwise haircut or promoted in different regulatory frameworks. So that part, I think, is a fundamental chasm. It's a true gap. And once you go into negative territory because of that, nothing will make sense. the other part that i thought was really kind of interesting and this is more for kind of the meta

of what rating agency ultimate stand for is the heavily penalized strategy for the operational risk vector for which they are custodians of their own assets and therefore they have cyber security risks and their cyber security risk is pretty profound because if they were to lose controls of their private keys their whole business would be at stake i'm a little sympathetic to this kind of operational issue that rating agencies have not dealt with. But at the same time, the territory now that we're going into is rating agencies specifically telling you that self-custodial solutions are bad, right? It's this idea that things need to be intermediated more and you actually do want more middlemen and all these things, which is exactly what Bitcoin is trying

to be an attack vector for. So that being also a penalty when in some sense could also be perceived as an asset, if you're truly risk remote from having intermediation, which makes it a more robust security to hold on your own balance sheet, one could imagine that could also be a plus. But again, it requires a total reset of your mindset and a regime of underwriting. When you think through the report, what's more important to you, the logic that went into it or the rating itself? I'm assuming the rating itself is kind of like the headline. People you'll pay attention to that. You are one of a few people who will actually read the report, but in your mind, what is more important, learning how they're thinking about this

or the fact that it's a B minus and now we've kind of like let the genie out of the bottle, if you will? Absolutely. Definitely learning how they're thinking about it is important because how they're thinking about it helps us anticipate what the next incremental progress has to be made for the industry to advance. So we already know that accounting rules have gotten easier with ASC 820 clarifying on how to treat assets that basically have to be measured at fair value. We know that the CIMT guidance that has been coming out of Treasury and IRS is also permitting the possibility of Bitcoin adoption on corporate balance sheet. But the third vector is insurance and credit risk. This is actually one of the hurdles to having more corporates buy Bitcoin

on their balance sheet. Take, for example, Apple, right? Apple has billions of dollars of cash on balance sheet. What this report just showed you is, hey, Apple, if you go buy Bitcoin on your balance sheet, not only are we going to just reduce that to zero, we're going to turn that into a negative number and double hit you with it. So when you see stuff like that and you're just a normal corporate who wants to get credit rating, you're going to be like, I'm not going to buy Bitcoin on the balance sheet because now I just realized this is going to hit my credit score in a way that is so detrimental. And so it's really important and it's a good thing that we now know how they're thinking about it. On the other hand, it's a huge hindrance. I think now

this is very clear that most companies who are blue chip are not going to buy Bitcoin on their balance sheet because what we just saw in the treatment was so incredibly unfair. At the same time, for strategy in particular, getting an actual rating assignment is important. And for that, again, I think it's a worthwhile thing that Saylor did. I'm very grateful for what he's done for the Bitcoin treasury space and crypto at large, mainly because now we can still contextualize what the risk spectrum of Bitcoin adoption means to other players in this space. So what does that mean? B- is fairly severe in its categorization of high yield. It is speculative. It is maybe five or six rungs below investment grade. So it's not great. But there's numbers associated

with this, right? B- is about 10% to 12% of a credit spread. It's actually kind of what the Prefs have historically been pricing regardless with the converts, which again, I think is how S&P ultimately backs off to B minus. I don't think they actually did it bottoms up. They just did top down and looked at where the rest of the capital structure is trading and saw, oh, it fits in this box. It must be B minus, which in itself, if you think about it, is kind of hilarious. But that's important because it helps people think about what that 10% to 12% risk premium can mean. So, 10% to 12%, that's probably about four times a regular high yield, maybe eight times investment grade in credit spread. And it implies about a 10% chance of default over a year and over a five-year period. It implies maybe a 30% chance of default over a 10-year, 45%, 50% chance of default. and so it's good people should think about these kinds of things what i think though then people

will realize is wait what jeff just said makes zero sense you're telling me strategies chance of default goes up with more time when in more time we actually expect bitcoin to be even better of an asset so then i think people will have this aha moment which is bitcoin has always had a backwardation to its risk spectrum for some who understand the relationship between bitcoin and fiat. It's more likely, in our opinion, that credit risk for strategy goes down in five years and in 10 years because of Bitcoin's performance relative to fiat. So the credit spread itself implying what B minus means across the contango of general what a default curve looks like is, I think, showing folks that it's not a compatible framework.

Let me ask two other questions, maybe as offshoots. So one is, what if they're right? What if the rating agencies are smarter than we give them credit for and B minus is the correct thing? Should we take a signal from that? Or is there any lesson that we can take out of this other than just, you know, I think it's very easy for me, you and all Bitcoiners to say they're wrong, right? Like, look how they made this mistake. what if they're right? Or are there certain areas where maybe they've brought up points that we should say, actually, you know what? This is a really good point that we haven't been thinking about. We should start addressing it. Yeah. Yeah. I actually think they are right about the score to the extent that, again, we know the market clearing price for MicroStrategy credit spread is around 10% to 12%. So this is a nice way to at least formalize that there is an ability to kind of put strategy in the same box as everybody else. So that I think they got right. I think B minus is a right level. What I think they got completely wrong is the process and analysis

for them to have led to that conclusion, which is the part that I find hindrance for further adoption because the methodology itself was so punitive that what it's making it possible now is for those that are rated A and AA would actually not be able to buy Bitcoin on their balance sheet knowing how it affected their credit. At the same time, imagine a world where Apple does buy Bitcoin on the balance sheet and the credit spread doesn't move at all. In fact, people still think it's better than US sovereign and therefore this is actually as good as money comes and credit spread doesn't move. What is the ratings agency going to do? Notch Apple down to C because they bought so much Bitcoin under a balance sheet

when they have incredible cashflow, incredible kind of capital market liquidity. And the market is always right. I'm a big believer the market sets the price for which risk is tolerated for. One more thing that I'll just add that I think was the cherry on the cake here is one benefit that the S&P did provide

and give credit for was that strategy has deep access for liquidity. and it appears that there's a lot of demand for their products, which is like, oh, that's good. Like we should give a plus for that because they have found some proprietary pool of capital for which that they're a liquidity provisioner for. If you draw the full circle now together,

this is what they're telling you. We think this is a bad business idea because your equity is negative based on our RACC framework that Bitcoin is on your balance sheet. But two, it seems like lots of people really like your stuff and your liquidity is super high, which we love. So now we're going to give you a boost back up and give you points for that. But third, let's not do that. Because

you're basically long Bitcoin and short fiat, and we don't know how to understand that world. That's what the analysis of that report tells you basically in three bullets, which I think is the part that just requires a lot more leveling up to do. Second question is, how do people make money on this? What do they change in their portfolio? How do they think about strategy in their portfolio differently or maybe other things? They have a lot of preferreds out there. Just talk through the implications of a report like this for people's portfolio. Yeah, great question.

Again, this goes back to normalizing strategy by having a rating assignment that allows a peer set to come in. So now we know it's B minus. What does that mean? Who else is B minus in the S&P universe? JetBlue. JetBlue is B minus. So if you had JetBlue paper and you're thinking maybe actually the kind of diversification

I want might look different by having strategy in there. As a fund manager, you actually now have the ability to have these conversations without the investment committee saying it's unrated. So it is much like the same game that Bitcoin has always played, which is just let us play, give us something, and then the market will figure it out. But like, let us in the game, let us in the room. And what effectively is now possible is some high yield bond manager is going to be able to look across the universe and have a cohort for B minus or Bs. And they're going to be able to play some substitution. And strategy, I think, will find a place. Within the intra-capital structure of microstrategy, I think this is also a really powerful engine for preferred adoption

because next after, preferreds will probably have to get rated too. And once the preferreds are rated, this is the game changer, right? Because we know the preferred market itself is actually the most kind of interesting market where there's a lot of arbitrage and a lot of capital chasing yield where there aren't plenty of options. So once that I think happens, it'll be much easier for these prefs to trade at a level commensurate to where they should be. So that's kind of the next level I think to come. Today's episode is brought to you by Bitcoin IRA. Are you a crypto investor with a retirement account, but don't have any crypto in your retirement account? Listen up, this is for you. Bitcoin IRA is revolutionizing the way Americans save for retirement by helping

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that like the Bitcoiners somehow find a way to become the cool kids in the room, right? And, you know, it's kind of our graduation now to Wall Street and BlackRock becoming a Bitcoin company or whatever, right? This does feel like a little bit of a Trojan horse. Like everyone's like, oh, these B minus, you know, losers in the corner.

And then all of a sudden you turn around and I don't know, A, A plus, you know, the world kind of changes and kind of realizes the value of Bitcoin on the balance sheet. But it does feel like a very Bitcoin native type, you know, progress, which almost feels like we're like making progress, but walking backwards. Yes, yes, yes, yes. But we should still celebrate the fact that we are moving in the right direction.

100%. And this is exactly what Saylor is really good at, right? He figured out MicroStrategy for the first wrapper of Bitcoin holding when Bitcoin ETFs were not possible. And it was like, just give us a shot, let us play. And then it proves its case. I think ratings agencies now coming in to at least let us be in the arena is the most powerful thing that could have happened. So regardless of what the report says, regardless of its fallible arguments, regardless of whatever perverse incentives might now arise out of other corporates being able to buy Bitcoin

at the balance sheet, putting that all aside, I think the market will determine what the risk clearing price is for the kinds of considerations that they want to be paid for. and my feeling is that the B minus ratings category strategy will stand out versus its other peers that I do believe are truly speculative in the nature of their credit because of their CapEx or because of the cyclicality of their business. Strategy is a very robust capital structure and smart money managers will come around and see it and then we'll push it forward. Speaking of another product that's getting an entry into the room, uh we now are seeing solana staking etfs uh your former farm your former firm uh bitwise is uh one

of the firms that's leading the way here um i think we're both very big fans of what they're doing uh i think i'm a little surprised how quickly we're getting these in the market um but it does feel like staking in general kind of yield generation is as we see i mean wall street loves that right like this is something that they are dying for uh talk a little bit as to like What exactly is going to be happening here? And what do you think the importance is? Yeah. The symbolic significance of having the Sol ETF go live is this is the first ETF that

has now passed the rung in the framework that we've all been hoping for, which is a general listing standards. Rather than having every one of these be argued through a 19b4 and whether it's a security or a commodity or going through that administrative motion, now we have a path. And because that path has been established, it's not just the Sol ETF. There's a few others coming in online as well today, for which I think it's just the beginning. So that's the thing that is most symbolically interesting. Two, as you pointed out, it's also staking, right?

Staking in the ETF wrapper that historically is something that the industry has been wanting so long, and now it's being permitted. And that, I think, are both exciting things that are happening. You know, Bitwise in particular, I'm just really proud of this particular moment because I think as a firm, we've always had this long-term vision that asset management is just going to look really different in the future. That it isn't just going to be about the distribution business of FAs and RIAs through education. Of course, that's important. But we know the underlying asset in this wrapper are code. And that the income and economic value capture framework of that will just look different than administering funds, like the way that the iShares funds might exist.

And so staking is now a representation of that expertise an asset manager or an issuer can bring to the table that is going to speak so differently versus others in the space. I would love to have Bitwise sit next to BlackRock and talk about staking in a way where we can show our proprietary value proposition. For example, Bitwise actually runs its own on-chain solutions through the acquisition of a test net from the prior year. And I will call it the first vertically integrated asset management company in the crypto arena, which means in the end, the efficiency gains are passed to the customers. So we have this ability to have an asset that we can then internally operate at the highest level of standards to maximize the yield from being our own validator to then be the best

performing ETF on a net return basis. that kind of synergy is solely affordable only to those who are native to the crypto arena. And for that moment, I'm just very proud of where Bitwise is. I think this is just the beginning of the value proposition that we can compete on that is going to be just different than being the largest asset manager in the space. So for other non-Bitcoin-related assets, I think that vertical integration of staking and other features is going to be a huge component. I don't know if this one or in general, how are people thinking about the staking rewards? Is that just going to go into the fund and NAV goes up? Will they buy back shares? Will they actually distribute? Do we

know yet how these asset managers are thinking about those staking rewards? I think for now, it's going to be a total return construct. And the toggle that everyone seems to be focusing on is whether you essentially stake 100% of your assets or do you stake less than that and engage in different ways to provide liquidity for those? Do you also choose a liquid staking derivative as the underlying asset instead of the actual native asset? Those are kind of the different points for optimization that issuers are navigating. I don't think that the intention for now is to have dividends that come out of that. Well, I guess you would need to have some liquidity for the creation redemption process. And so, yeah, it would be interesting. Some people

want to maybe take 50%. Some say, well, we're going to go to 75 or, you know, maybe the size of the fund really matters in terms of percentages or whatever. You can easily see people starting to try to arb or, you know, figure out who's going to have the best total return. And, um, it does kind of put the onus back on the investor, a little bit of active management, even though you're buying a, you know, uh, uh, kind of definitionally, uh, a passive fund. That's right. That's right. Yeah. Unlike the Bitcoin, uh, ETF, which I do think is more vanilla, more commoditized because it's a Bitcoin holding vehicle. And there's not a lot of ways to compete on that outside of price and liquidity and fees. This is different. This is categorically

different because the income is going to look different and the know-how and the finesse and how you execute that capital efficiency and liquidity management is key too. And it's not just in the crypto ecosystem. The ETF wrapper matters too, right? Because the ETF wrapper can actually have different kinds of credit facilities as a bridge to permit different kinds of features that are possible. And a lot of traditional illiquid asset ETFs do this, right? Like the bank loan ETF, for example. Of course, bank loans can't have daily create redeems given how illiquid the underlyings are, but they have clever ways they figured out in a more capital markets facing way where that edge is also useful. And that edge then also comes from the service providers you

work with. And in that context, having the ability to navigate in crypto and TradFi smoothly is a key advantage when you think of these uh traditional firms the black rocks the fidelities you know those folks um how are they going to navigate this right because it really does become i i just keep coming back to this idea that black rocks most profitable fund is the bitcoin fund now it you know i think they charge 20 or 25 basis points for it um size times a higher price than your s&p fund right you get there once you get into staking it's like this is a whole new arena enough for them. And it's one thing if your most profitable fund comes from this industry. It's a whole other thing if your like, quote unquote, crypto asset management business

drives more revenue and profits than your non crypto, like the collective revenue coming from crypto actually outpaces everything else. Because I think that when you have one product that's highly profitable, but it's a single product, it does still feel kind of like, is that a one hit wonder right and we've got this great business it's very diversified it's very resilient we've got all this infrastructure but there has got to be a tipping point at some point all of a sudden you're like wait a minute why are we continuing to invest in these legacy things where we just don't see the growth that we see in crypto and the truth is probably i'm guessing it's not black and white but what is that tipping point in your mind is it a revenue thing like how do you think

these guys are going to think about when they're just like screw it we're a crypto business now Yeah, yeah. It's funny. I think this is actually, you're just reminding me of a huge story that's been unfolding in the capital markets that crypto probably isn't paying attention to, which is the QQQs. So Invesco, QQQs, are, I believe, holding a meeting relatively soon, where they're going to, I think, recut the pie of that P&L ref share, right? Um, so, and, uh, I believe there's a lot of drama associated with the timing of this naturally because it's a big motion. Uh, and the big motion here is to actually change the role of, um, Invesco to be, I think beyond just like a traditional distribution agent where it's a little bit more asset management like, um, and, uh, and, and the, and the tension really comes from like the different parties that hold the keys, which is like the custodian, right?

Like Bellin has a key part of how much they take. Are they earning too much? Are they earning too little? Is Invesco doing more than just distribution? Is there actually fund management services and that kind of tension that can exist? When the product is like a commodity, I think it's more easily acceptable that it's a distribution business and there really isn't like a core expertise required for the asset management services associated with that.

At the same time, you could imagine the pendulum can swing when things start to look a little more active, even in the passive arena. And that's what these non-Bitcoin ETFs are. These non-Bitcoin ETFs, I think, require a lot of active management, even though people will think of it as passive because staking, by definition, is not a passive endeavor. Lots of times people think staking and dividends are Perry Pursuit terminologies to be interchanged, but it's simply not true because dividends are essentially declarations of returns of capital for which every shareholder is due the same amount.

you and I will get the same dividend by just holding the stock. It is absolutely not true that you and I will get the same staking yield where we choose to stake it differently or we choose to partner in different format. There is no universally cleared staking rate that considers the composite total return to be egalitarian for every participant. There will be dispersion of performances. And in that world, active management does matter. And for BlackRock to be able to speak eloquently to this must mean they understand staking at the deepest level and have those conversations with their customers. At Bitwise, because we run our own validators and because we actually have our own on-chain solutions, which again, we've developed a stack to have these

robust infrastructure capture. Not only is it a little bit more authentic in my opinion, and a little bit more credible, but really we are the firm that's going to get the phone call when people have questions. A lot of times, the reason I believe Bitwise has been able to have staying power through all these years is because we have an incredible distribution team that picks up the phone every time somebody calls and has questions. And the questions can sometimes be really basic, like wanting to figure out how it works with their brokerage and administrative issues around that, but it could also be more sophisticated. And it's also an access point because what I've noticed at least is a lot of Bitwise's best investors are not just in it for

the financial motivation. So to your point, it's not just about fees, even though Bitwise does compete on having the lowest fees possible. I believe the sole ETP is actually free for a while for those who are listening and want to take advantage of that. But it'll advance to the point of where as they want to learn more about it, Bitwise will actually provide forms for it. So we'll bring the human capital. We'll actually bring interesting thought leaders to speak to things that are happening behind the scenes with our financial advisors in a point-to-point, person-to-person format where there can be intelligent and robust dialogues of intermixing ideas. And so that's actually, I believe, what it means to be a crypto-native financial advisor in

the middle of that information flow. And that's very valuable. It's almost pricelessly valuable. And I think Solana will open that door for a lot of people. Bitcoin. It's not magic. Here's how it works. Core is a protocol secured by elected validators. You can help elect validators and secure the network by simply locking up your Bitcoin on the Bitcoin blockchain. No bridging, no lending, and just holding. When your validator secures core, it earns rewards fueled by network activity and passes them back to you as yield. With a minimum lockup of just one day, when the time lock ends, you get your Bitcoin back untouched. Still your keys, still your coins, now your yield. For even higher rates,

stake core alongside your bitcoin and multiply your yield and if you want to see what your bitcoin is securing join millions of others and exploring the largest bitcoin defi ecosystem there are over a hundred live apps in the network and the deepest liquidity in all of bitcoin defi get off zero and start earning yield on even just one percent of your bitcoin by going to stake.cordow.org slash pomp again that's stake.cordow.org slash pomp or go click the link in the description another place where there's uh priceless information is uh on these prediction markets it seems like these prediction markets are very accurate now i'm starting to think that uh they're claiming a little bit of victory after the fact right because uh there will be these wild

swings in the predictions and so they're earlier than you know the news or polls or whatever but i think that now somehow people have extrapolated whatever the prediction market says is actually going to happen. And they don't think probabilistically about it. I bring all that up because you tweeted a fantastic market, which I think has currently 65% chance that Donald Trump is Satoshi Nakamoto. I have no clue how the market got to 65%, but this prediction market is saying that there is a more than 50% chance that Donald Trump is Satoshi. Do you believe that? And maybe just talk a little bit about this idea of the prediction markets and extrapolating quote unquote truth from them. Yeah, this tweet was actually a bit

of a double dipper because it was meant to be a bit of an inside joke to an inside joke, which is, as you know, and we all know, polymarket being the source of truth can sometimes also be blinded by the fact that there is just lots of misinformation that is out there. So for instance, that particular Kalshi market that I screen shared, it's actually not a real market. Somebody designed it. And there's a website that lets you create these fake markets and fake graphs and go viral and whatnot. But the double inside joke here being, even those who are paying all that attention think it's real and therefore realize you are now susceptible to misinformation because you thought Kalshi was the thing that would be having an authentic market on true information discovery but it turns out like

all of these things can just be faked uh so so the double player is like that's not a real market and the response below which i thought was so funny because he's just now going down this deep rabbit hole about trump's grandfather being like a tesla investor or friend and this book i don't know if you've heard this baron trump book from the 1800s that apparently predicts the rise of Donald Trump, 200 years later, this, and, and it's just an incredible rabbit hole. Is it on Amazon? Can I buy it? So here's the thing. I've been actually going down this rabbit hole myself. Oh, here we go.

I am a sucker for a great conspiracy theory. We need some tinfoil hats to just put on when we, uh, when you start going down the rabbit hole. There are lots of, um, verifiably, uh, neutral sources of truth like Wikipedia that talks about this. And so allegedly, allegedly but we all know wikipedia too is also like not totally uh infallible that's why that's why elon's building grokkopedia now that's right i mean maybe we need a world where all of these come to building consensus together but but there is a lot of information out there and i have yet to see a actual physical copy of this book i have yet to see it i think call me old school

yeah somebody show me the first edition of this book what is the book supposed to be it's apparently a trilogy of this boy named baron trump going on an adventure and he's mentored by someone named don and actually has some lore to it that people have just kind of fallen in love with great internet fodder great internet fodder um but bring the whole point back to like you know the the the challenges of these poly markets is that like yes it's real but also like we gotta do our homework and make sure like it's real so anyone who says like yeah that's free easy money of course donald trump is not satoshi like that's like free money it's like well it's not because you can't bet on it yeah so like anyone who says

that they've bet on it also hasn't actually been practitioners of the market because they would have seen oh this is so you know what's funny to me is um i always uh joke uh i love the line like technical analysis is astrology for men right just like you know like they'll draw the lines whatever i always thought that was just a great line yeah the book kind of feels like same thing right of like uh people are bored bitcoin's going sideways we need something to talk about somebody you know whether the book's real or not they throw it out on the internet now you got a whole bunch of you know internet sleuths uh all arguing about it and uh it helps us pass the time while we're just waiting for bitcoin to go back up again no it's true and the other point you made about how

these markets sometimes feels like it's not being awarded for the probabilistic nature of outcomes that sometimes it feels too deterministic the other particular market that i think has been really interesting to watch as new yorkers was the new york city mayoral election right because mamdani's been basically sitting at 90 plus percent to win for days now for days um and it's probable he will win but but as you know and anyone who's lived long enough um one first of all anyone gives you a 10 to 1 payout, you should take the other side, especially on something as fallible as elections where things can change very quickly. And there's just tons of kind of bad voting and bad data out there. But that idea in itself, being totally insurmountable is where

the edge is. And so I think those who can think a little bit more probabilistically can find economic opportunities in those, as long as, of course, the real markets, which this one is matt do we know what the odds are uh the latest odds on the uh the election the reason um that i find it interesting is uh it seemed like more of 90 to 90 89 for mom donnie right now is that that's come in then that's come in because it was up to 95 at that point right it's come down um but what i found fascinating was actually um you know he had this uh performance at the last mayoral debate and i think generally people who were objective like there's gonna be extremes on both sides hey he did amazing he did bad whatever but like the objective people seemed

to be like that was not his best performance right um he said some good things he said some bad things but like that wasn't his best but the odds had gone up after that i found that very fascinating right and one of the things i'm trying to wrap my head around with these prediction markets is there is something about like just the amount of money that's widget like it is a market right and so you can like move the market if there's low liquidity now the mayoral race is actually not like one of these like kind of light liquidity but if you and i create a market tomorrow and it's like you know is uh is jeff gonna do you know i don't know go to chipotle we can you know frankly just manipulate it by there's only two people betting on it right and so like

that feels like something that again where a takeaway from an event is one thing but the market moves in the other direction i think i'm still trying to wrap my head around do you trust the market you know uh or do you have to get some sort of um calibration because then we saw three or four days later the market actually did come in and so is it something where like it takes time for the market to digest the news is it something about you know that the liquidity of the market like i think that there's just a lot of things that as you get into the more nuances right and you're trying to figure out what's the difference between 89 and 95 percent that we just don't know yet yeah it's easy to okay look whether it's 89 or 95 that's really good odds right like you know

those takeaways i think are like the simple analysis but when you start to look at the market dynamics and stuff like there is still a lot that i think we're learning as this uh goes yeah yeah i think what you're alluding to is this uh really interesting question which is do prediction markets reflect the outcome without the bias in which the prediction market itself has affected the outcome right and there's two dimensions to the chicken or egg one is the one you just described, which is if there is a market out there on me eating a burrito tomorrow and I found the market and I saw the odds, maybe I will eat a burrito tomorrow, depending on who's on those sides of it. And I'll influence that outcome. But the other part of it is actually

the election too, which is if you think the odds are so unlikely that Mamdani will lose, does that disincentivize voting, right? Does that mean that that person who would have come out to vote for Mamdani doesn't come out anymore because he sees that and goes, oh, it's a shoo-in. I don't need to vote anymore. Vice versa, if you're a Cuomo voter, would you look at that and go, actually, I need to go vote. And therefore, I have now raised the dial. And so the prediction market itself somehow fed into affecting the outcome. I think that is really quite fascinating and one in which there's probably going to be more guardrails around what people call influencing based on what the information of these markets can dictate.

I don't care so much. Well, I do care about the politics in the sense of, you know, obviously, I don't think that socialism is a good idea. But what I'm fascinated by this specific election is lots of attention. The prediction markets now are like a thing. So people are paying attention to it. You have what I'll consider like some of the like political analysis in terms of which candidates stay in or drop in the votes and all that kind of stuff. what we have seen is there has been a surge so for anyone who's not paying attention to the new york city mayor election uh in the first three or four days of early voting there has been such a turnout that they uh believe we are on pace for the highest voter turnout since 1993 right bonkers and frankly part of it is like you know a lot of people regardless of which side they're on think like socialism versus capitalism is on you know on the ballot and they're going to go and they're going to kind of vote whichever way they want a huge portion of the people who have come out are boomers and i saw a mum donnie statement that basically was like he didn't say like we have it

in the bag but basically we're not worried you know we've believed that the market is showing the polls all the stuff like you know we feel good about our our odds but then i saw somebody online on x show a uh a campaign email that went out that basically was like a lot of people are voting and they all tend to be you know in age buckets that we either are losing or tied with cuomo right and so you start to see this very interesting like like kind of like the internet election you know i think people a couple years ago were like very interested in this idea of like the first internet generation and election now we're seeing this blending of like all the things like you and i care about right it's like prediction markets kind of the way you communicate

data analysis uh also there's this like showmanship that plays into it then you got like the social media videos i just feel like we're in uncharted territory right and so the same way i think that we're like in a volatility generation in asset prices and like markets i kind of feel like that way in politics of like we may be the night before and people have no clue who's gonna win yeah yeah and it makes it kind of fun but also kind of makes it a little scary oh no totally it's fun scary and weird right the internet uh town hall is just flat out strange so take for example this um there is a huge i believe republican donation to kamala harris for her chance to potentially run again okay meaning like the republican party in itself would like oh if she wanted to run they

would they would donate yes yes yes and you would you would almost find that like crazy but now it's like oh of course you would do that yeah yeah like that that makes sense yeah it's like uh you know the the defender on the other team's your best player yeah yeah that's right and you see this playing out in the internet town all the time um you know one aspect of it and this is now we're going into a little bit more politics than perhaps we've historically done. But like, you know, people are obviously feeling very emotionally heated about this particular election. And there's many lines to draw it. Some of it is, of course, socialism versus not, but it's also the young versus the old, right? That's the big demographic split that's happening

here. And the reason young people are obviously choosing Mamdani is because they're out of the system. They're just, they don't actually, they just want to belong to something. And this is a clear way to belong. And if you're that outside of the system, this is the only chance. So the way you make capitalists out of these people isn't to tell them, hey, you got to be a capitalist and lecture them. You just actually turn them into capitalists by giving them capital. That's actually the best way to do it. But what we're seeing is that's not the operation. And so when you see a bunch of billionaires tweeting in New York City, talking about how Mamdani is going to be the worst thing that's ever happened. I've at times felt that in itself is actually

antithetical to what you're hoping to achieve, that you're actually making the situation worse because that voice is not the voice that's going to convince those who are otherwise on the margin. And it reminded me exactly of the Trump and Clinton situation, which was when any time there was the voice that felt a little bit holier than thou. Like patronizing. Exactly. And saying, you know, you're voting for Trump for all the wrong reasons in like a patronizing way. It mattered who that person was because that person, if you didn't believe was representing you, meant you were just going to go against that person. And the problem that I'm seeing in New York is the exact same thing. We have the billionaire class going actively against Mandani, but that's the wrong voice. They're actually antagonizing their base even more to go then support Mandani. What you actually need is a young person who's against Mamdani and able to relatably tell the story of why this is the wrong path. They don't want to hear from the billionaires telling them this is not the right choice.

It's a stronger fuel to go vote for Mamdani. You know what's interesting is I do think that there is this heuristic where Andrew Cuomo is a professional politician. like if you look at some of the campaign videos he's done recently he has um you know uh jews for cuomo muslims for cuomo he even has i think i saw a video where he has like muslims against zoron right and like to your point he's going to the actual groups themselves and saying hey let me talk to you record you saying this stuff and then i'll like give it a platform right right which i think you're addressing but also there's this element of um people are getting much smarter about how to drive eyeballs on the internet and so i'm going to make a little bit of a

connection here which brings it back to the crypto industry um in the same way that we see the politicians looking for you know there's always like their uh competitor makes a mistake they're out in the press conference the next day somebody one time told me i don't say who it is but uh they told me that uh chuck schumer is chuck schumer because he has a press conference every day and he'll figure out even 20 minutes before what he's going to talk about but his press like it's all about you know get the eyeballs get that whatever coinbase very very very well grabbed attention by buying the 25 million dollar uh up only podcast nft yeah and if you look at the announcement i think they technically bought eco for 400 million dollars

it just happens to be the night before the announcement of the 375 million dollar acquisition they bought the nft for 25 million and there's like a 12-hour period where people were like is this company insane like like what are they doing this and they just got tons of you know quote unquote free eyeballs or free marketing yeah and then they turned around and then it all made sense the next morning, but that feels like the society we're in, whether it's, you know, companies, whether it's politicians, like everything now is about how can we creatively grab attention and put that attention, you know, where we want it. Um, which just means, I think you gotta like think more critically, you know, as, uh, as we kind of navigate all this. Yeah. Yeah. I mean, I think

this is, again, speaking to people is just on relentless demand for authenticity, right? You just want something real and something that doesn't obviously feel paid for. And this is one example where Coinbase is continuing to reap the benefits of that transactional dynamic. I don't know if you've been following, but Chill House is now involved in this drama that is where Jesse and Kobe are partaking, ratioing each other. And it's hilarious. It's so fun. There are times I literally go home and i'm like all right should i watch some k drama with my wife or uh go on crypto twitter and you know chill house is a fun one and that is eyeballs right there that's competing with netflix and coinbase just now found its way to compete with netflix for attention so i

think that that that is absolutely the right path and the reason it's compelling people like me and others is because this is more authentically interesting than any kind of paid sponsorship ads that you will ever see across these campaigns yeah could not agree more all right thank you so much for doing this. Do it again in the future.