TGIT: Bitcoin, BABA and Bayesian Bets

Alibaba, Bitcoin, Bayes, CBDC, Doge, DraftKings, Polymarket, Kalshi, LiveNation, the Grammys, and more. First time reading? Join other risk-takers, entrepreneurs, traders, investors, data geeks and alpha types. Sign up for free here.

TGI Thursday! While members of the political class have their hands full (and hearts pounding) as they digest the cabinet appointments President-elect Trump announced this week, we turn our attention to surging cryptocurrency prices and a breaking development that captured our curiosity. Yesterday at 6 a.m., Federal agents raided Polymarket CEO Shayne Coplan's New York apartment, seizing his electronics. The raid came after the offshore crypto prediction market platform had shown odds for a win by Trump significantly higher than for Harris.

In a post on X, the 26-year-old Copeland called foul. Plus, a Polymarket spokesperson characterized the raid as ”obvious political retribution" from the outgoing administration over the platform's accurate election prediction. The company confirmed to Reuters that Coplan wasn't arrested. But, according to Bloomberg, the Department of Justice is investigating Polymarket for allegedly allowing U.S. users to place bets. We’ll be watching this story closely.  

In other market news, wholesale prices nudged higher in October, according to Producer Price Index data released this morning. The rise was in line with expectations. 

Bitcoin, the big story of this week, is trading 2-3% lower this morning. This issue provides crypto traders with thoughts on what lies ahead. 

Now, let’s get lucky! 

Editorial Director

Alibaba, the giant China-based retailer and e-commerce powerhouse, reports earnings tomorrow. The company is saddled with cautious domestic consumers, a sour national economy and unsettling uncertainty abroad, yet it still appears undervalued. Here's what you need to know before trading its stock. Read Full Story

100

The average number of parcels delivered to each person each year in China. It’s 65 in the U.S.  — South China Morning Post

Tariffs can serve two purposes: raising revenue and protecting domestic industries. While President-elect Trump views them as a way to offset lower tax revenue and provide negotiating leverage, they might trigger retaliatory measures that could stymie global trade and thus impede economic growth. The tariffs already in place generated $84 billion (1.6% of federal receipts) over 12 months through September. Proposed increases to 60% on Chinese imports and 20% globally could raise $1.1 trillion, potentially offsetting corporate tax cuts.

The conventional wisdom holds that tariffs can cause inflation, but according to today's briefing from Yardeni Research, that's a low-probability scenario.

"Our biggest fear is that a trade war slows the global economy. We still don’t think that’s likely, however. That prospect is included in a scenario to which we ascribe only a 20% subjective probability, a geopolitical and/or domestic debt crisis.

Additionally, we see 55% odds of our Roaring 2020s scenario and 25% of a 1990s-style melt up of the stock market."

With the blessing of the incoming Trump administration, cryptocurrency has soared to record-high prices. But what about government-backed digital currency? Eleven countries, including China, have launched their versions of it. Yet privacy concerns abound, and the president-elect isn’t alone in speaking out against the "digital dollar." Read Full Story

In the 10.24 Luckbox we noted $1.6 billion in short-covering liquidations would likely occur if the price of Bitcoin (BTC) breached $69,000. Well, that happened. The cryptocurrency is trading above $90,000 today.

But only 16% of Americans have bought, traded or used cryptocurrencies, according to a recent Gallup poll. For the other 84%, here's a remedy. A video series called Crypto: Where Do I Start? features seasoned futures and options trader Katie McGarrigle stepping into the world of crypto with Ryan Grace as her guide. Watch it every Monday and Wednesday at 4:30 p.m. CST on tastylive, or on demand on tastylive's YouTube channel.

Veteran crypto traders contemplating Bitcoin's near-term outlook should watch this roundtable.

President-elect Trump has announced plans to create a new Department of Government Efficiency (DOGE), naming Elon Musk and Vivek Ramaswamy as potential leaders. The proposed department, whose acronym recalls the Dogecoin cryptocurrency, would focus on reducing government bureaucracy, eliminating excessive regulation, cutting wasteful spending and restructuring federal agencies. Read more on Musk's plans here and the potential implications for the currency, here.

This week's Cherry Picks ranks the sectors that benefitted from the outcome of the elections, offers a tutorial on options backtesting and includes two new trade ideas.

AI cloud provider CoreWeave is said to be working with Morgan Stanley, JP Morgan and Goldman Sachs to prepare an S-1 filing for a 2025 public offering north of $23 billion. Our analyst traces the company's rapid rise, describes its ability to attract an impressive client base and explains how it secured the backing of Nvidia, Blackrock and Blackstone. Read Full Story

NFL Bettors Beat the House 🏈

DraftKings (DKNG) reported 39% growth in Q3 revenue but lowered its 2024 guidance because of unprecedented NFL betting losses. Using last Thursday's Ravens-Bengals game as an example of what’s gone wrong, CEO Jason Robins faulted "customer-friendly" outcomes, where favorites won and popular players scored. Sportsbooks benefit when underdogs win and backup players perform well, he noted.

Robbins also mentioned that DraftKings is “looking at” prediction markets “in advance of the next presidential election, and potentially it’ll be an opportunity to look at something sooner.”

Grammy Bets 🏆

Grammy nominations were announced last week ahead of the awards ceremony in February, and Kalshi is already offering 13 Grammy prediction markets you can bet on. The Rockhound reveals who she's betting on in the big four categories (Song of the Year, Best New Artist, Record of the Year and Album of the Year) and also shares her picks in the rock and alt categories. Read Full Story

Ticketmaster's parent company Live Nation (LYV) hit record highs Tuesday morning as shares in the entertainment company soared following a better-than-expected earnings report. The company's profitability is up 39% to $474 million over the previous year, it has operating income of $640 million and its adjusted operating income rose 4% to $910 million. Though revenue fell 6% to $7.7 billion, CEO Michael Rapino said this was the company's "most active summer concert season ever," thanks to massive stadium tours from the likes of Taylor Swift. 

Better Betting with Bayes 🎲

In Everything Is Predictable: How Bayesian Statistics Explain Our World, Tom Chivers delivers an ambitious exploration of Bayes' theorem. His analysis presents readers with a fundamental tool for understanding how we try to navigate uncertainty, constantly basing our decisions on incomplete information.

In particular, we were drawn to the book’s discussion of Phil Tetlock’s seminal book Superforecasting and the utility of the Brier score, which measures the accuracy of a set of predictions. Chivers champions the Bayesian approach of updating beliefs based on new evidence, emphasizing that "all decision-making under uncertainty is Bayesian—or to put it more accurately, Bayes' theorem represents ideal decision-making.”

Everything is Predictable is a recommended read for probability geeks (aka Luckbox readers), active investors and prediction market traders.  

More Cowbell

Is Trump the most pro-stock market president in history? 

With Trump 2.0, the stakes are much higher. 

How to spot a (stock) fraud. 

Shakeup among the top five in the NFL power rankings. 

The real reason Trump won’t try to fire Jay Powell. 

Odell Beckham Jr. has the last laugh.

China’s dominance in rare earth metals. 

Does the Paul—Tyson fight have a “scripted” outcome? 

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