The Chopping Block: How Prediction Markets Outsmarted the 2024 Election feat. Laura Shin - Ep. 733
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The main media overwhelmingly was dismissing this delta between polymer and the mainstay media as being attribute able to bias, right? The idea was that, well, Polly, market is a bunch crypto brows. A bunch of, you know, these people love trump. These people are kind of shadow focus on the internet to just manipulating markets and who knows what they're up to. And the major we never once acknowledge even the possibility that there might be some alpha in the petition work .

as if they know something .

that the polls .

are not capture losses and someone else.

Generally speaking.

airdrops are of points anyways.

Three firms, very inlay I D.

five protocols are the entity to this problem.

Hello everybody, welcome to shop in block every couple of weeks. The first get together and give the industry inside the respective on the the topics of the day. You could contact first to get tom that if I made .

in a master means everyone, thanks.

You've got Robert the Christian sore and zar of superstate 哦， winning us again today. We have Laura, see you of the show.

G, M.

and i'm ceived that had had a dry and fly. We are only two investors in crypto, but I want to copy out that nothing we say here is investment advice, ly advice or life advice. Please chopping block and explanation for more disclosure.

So IT has been barely twenty four hours since the clothes, the election and obvious been a momentous election for everybody in the world. I'm actually in asia right now and was the my first time experiencing election outside the U. S.

And IT is very weird. Um is really I think I obvious. Ly, I felt an infinity with everybody in the us.

But I also felt like an election that, uniquely, people were experiencing through their phones, much more so than any previous election that I ve experience. Like all the previous selections, I felt they were really happening on T. V, and the internet was kind of the sideshow, but this felt like a really internet first election. I don't know what is you guys experience, actually just watching the election.

Give you my own personal experience. I actually thought there s can be more volatility in how the results unfolded. So you know, in prior years was a little bit more back and forth. I was expecting the Polly market charts to go up and down, you know, a little bit more. The only real back and forth was was fairly early on, you know in the foa production markets because there is no sound like early voting data all throughout the day.

There are signals coming out from like get out um exit polls and like aside from the water though, like none of the states really we're going back and forth trading off winners until you know wisconsin. But you know then it's sort of just tapped. But I was expecting more uncertainty, more terrible illness.

I was expecting cyp to markets in general to be significantly more by directionally volatile. But what really felt like the election results involving was that everything was just to drift up as trump odds drifted up. The results generally kept on being consistently a little bit Better than expected. You know big coin Prices in crypto complex, you know it's agree, get just drifted higher and I thought could be more promo. So I was a little bit you know underwhelmed by how just like consistent dev results were throughout the night.

IT was a lot more orderly than twenty, twenty yeah I thought .

I was gonna be like twenty, twenty or IT took a few days for all the votes to be counted and stuff that was like just a little bit confusing because I I don't think um the law change although I I guess the differences the .

pendered probably maybe that's why .

the vote yeah .

all the longer exactly prediction marked eighty back down felt like there is a lot of uncertainty in cause and every fifteen was its own kind of bucket and this just felt like yeah you are watching the market is kind of a shop up but still up um with constraint line and so um if anything like you said, I think um watching CNN felt antiquated um you zoom ing in different counties and give their play by play and it's like, well the the Margaret I pricing IT and they refusing to call you the election as of midnight and parliament at ninety seven ninety eight percent like what are really doing here yeah so .

this was a big theme of the night. Anybody who was following the twitter um or following basic the the crypto sphere is that Crystal seems like he was having a very different experience of the election than the mainstream media. And that really put Polly market at the center of the night.

So the market, the biggest tradition market, the words disclosure where investors in Polly market as his robot ventures um poly market did over three point three billion dollars in volume on the the main presidential election market. Uh IT was IT was is very striking how for one Polly market um two two things that really happened. I went through a lot of this in a tree thread that I wrote, write after the election closed.

So party market was pricing trump to win sixty two percent to thirty eight. So a clear favorite, not not an obvious blow up, but definitely he was supposed to be a favorite coming into election. According to polar market, almost every single poster and every single modeler had the race of delevan. So there there is significant delay between where polymer was saying and what, you know this were traditional media as well as the model lers were saying. And the modeler is overwhelming.

They only really use polls as inputs into the models and poly market by definition uses whatever people think is correct that are willing to bet their money on um and the the mainstream media overwhelmingly was dismissing this delta between polymer and the main street media as being a attribute able to bias right? The idea was that, well, Polly, market is a bunch of cyp T O brows, a bunch. You know, these people love trump.

These people are of shadow focus on the internet, who just manipulating markets and who knows what they are up to. And the major we never once acknowledge even the possibility that there might be some alpha in the petition markers that they know something that the polls aren't capturing and we know that pulls. I've got ten crappy and crappy over time.

So there was a lot of fixation, especially in the days before the election, of the person on polymer known as the trump whale. So the trump whale, not the trump of the french whale to the french whale, uh, was the single a person was betting on pyy market. And I think they had uh, upwards of thirty million dollars of open interest on poly market, a significant portion of the total open interest and he was single handle.

He used like four counts to just bet on trump, bet on trump winning the election, trump winning the popular vote as well as um he believed that trump is going to win six of the seven swing states and IT turns out that the trumpet whale or so the french whale has now is going to win over fifty million dollars from the collection of that that made the way fifty million of profit I I O K fifty million total that he's going to when you are twenty million of three of of profit. And it's supposedly this guy also bet most of his network on this particular election. So he was very, very all in on the idea that the polls were systematically wrong and now his claims, I think a lot of people were kind of laughing at his claims before the election once he was a mass.

But specifically, he did another interview with the walsh journal and the the claim that he made was very specific. And I think probably is that the way that pollsters were polling was the way they've been polling basically forever, which is they they put an internet survey and they say who you're going to go for. And they do much physical corrections because they know that the response to rats of modern polls are so low, right? The response or rats are like five percent that is so low that you know it's it's to buy a sample.

There's no way that a uniform sample of people are responding to polls. And so you have to do a bunch of corrections that these corrections are noisy. Um what he was saying was that the shy trump voter effect is the people kind of faults fy who they are going to vote for because they know that it's kind of not OK to say in in polite company that you going to go for trump causes people to just basically confederate so much about who are going to go for that you cannot trust what they say and a way to overcome this bias is to do is call the neighbor fect.

And the neighbor effect is don't ask people who are going to vote for, ask them who they think their neighbors are going to vote for, and they're much more unlikely to tell you the truth about what their neighbors are going to say than what they are going to say when they actually go into the ballot box. And he claimed that he had actually done this. He had commissioned a pollster to go in and and actually collect the poll, only asking people who their neigh's going to for and not themselves.

And he noticed there was a big delta between what this neighbor poll effect was reporting and what the real poles were reporting. Now he didn't do this across the whole country, but he didn't enough places to give him confidence that the pollsters were making a very, very big miss in the way that they were polling. And that was what gave him the confidence to make this big bet with his whole that worth on the uh the the poll outcome.

So very, very interesting story. And i'd say this also matches up with my own lived experience, which is that I I know so many people who were telling me in private that they were going to go trump and did not dare to say any of this publicly you know they feared alienation from their friends or their family or whatever. Um and there there was another endor from Harry stepping in the twenty VC guy who was saying that you when he was getting these vcs coming on the podcast, ninety percent of them as soon as the might turned off, we're like, I want to go for trap I think countries going to share I don't believe in the democratic story anymore, but almost nobody was willing to do IT on there.

And so every I feel like everybody kind of perceived this, like we sort of all saw this was happening. But there was this trust that the polls were going to figure that out. And IT seems like they completely failed in doing that.

This is an incredible anecdotal story about data being put into effect in the market and making the market more. Without people realizing IT. So this happens in other markets all time.

Like there's hedge funds that use you are performed sly using like satellite images of like parking lots to figure out whether walmart sales are going to be higher, lower than anticipated by seeing how many cars were like trafficking the parking. Let's like there's always been examples of either hedged funds or crazy smart people using data in new ways to make money because markets are mispricing things. And you know before all of the information came out reported to summer, like, oh, this guy is a fool, or always trying to do IT to manipulate the basket.

This is just a trader who had a lot of capital, because of that much capital, was able to commission his own polls to create propriety data that he had and then waged IT, which, yes, I did move the market Prices, but IT moved the market Prices closer to where they should have been. And he made a fortune, the process. And so I actually think this story tells, you know, explains the way of prediction markets just so eloquently, because this will not be at last time that people, you know figure out ways to make money by having an information advantage .

yeah I think also part of IT um is I do think that those are just fundamental, fundamentally different questions of you know um how how are all these different people going to vote and like trying to to um you go after like a representative sample of of the likely voters versus just um you know who who do who do I think is going to win.

It's a different question and so I actually feel like the pollsters um in a way, they're trying to do this um yeah just kind of more I don't even know how to explain IT, but um they're trying they're trying to get something in this like kind of um what's a wisdom look is just like a sort of like a like they're thinking about IT too hard kind of way if that makes sense. Where is um you know if you just want to get IT right then you will go about in a different way and and then you don't cause also I feel like there um you know like like you know all these different models, they apply like all the different states and you know like but that's like such a um IT I don't know. It's just like trying to make some recipe that has like fifty different ingredients where you really only want to know one answer.

Um but then one other thing that I was going to say about that was um so I I was also one of those people who beforehand I did think that probably the markets had some kind of bias tored trump naturally for probably two reasons. One is that, you know we have seen before that the election or the prediction markets do get us wayed by information that comes from the mainstream media. You know like around like earlier in the summer, like one biden was going to step down or you know who would be the democractic omi stuff like that. So you know it's not like there isn't that kind of two way um information flow. But I feel like um you know when you when you have the pollster showing that they are equal and then because of the uh electoral advantage that the republicans generally have united to the small state, uh small states just having more weight and the electoral college, I feel like that also would would like lead the prediction markets to then bump up trumps chances .

will no but the people who are modeling the polls based on modeling the election, based on the polls, right? The new york is doing this as was made silver, and many others just using the polls. Almost everybody was benchmarking at fifty, fifty for the electoral college, not for the popular vote. So the polls were telling a very different story about the electoral college, and the Polly market was diverging from that story.

And were the polls saying that h. Harris would win the popular vote? Yes, the pulls were .

saying here in the popular vote, but that the electoral college of fifty, fifty and parliament, who was saying the electoral college is not fifty fifty the electro al college is sixty two, thirty eight and you said in your answer that you know there is a two way street between the uh the prediction markets and the main street media.

And I think the problem is that it's nor is not a two way street is a one way street, which is that the prediction markets incorporate the mainstream media. But the mainstream media was not incorporating the prediction markets. They were dismissing the prediction markets.

They were saying this stuff is a bunch of, you know, fortune reading, trump loving, you know foreigners who are the crypto pill and they don't know that how they're talking about and their betting on their hope um and this was the mistake. I think that again, kind of is part of the whole story of this election was that the experts got IT wrong. The media was way over confident and almost arrogant in thinking that like the yes, we we know exactly what people want. We know where, we know where women are. Onna vote like White trump s warn White women, which was supposed to be like, oh, no, reproductive rights this is the story obviously nobodies buying trumps story about wanted to protect women and turns up no actually a bunch of these stories the tenos um like the the black vote so many these things broke for trump in a way that violated the narratives that the media was desperate trying to tell .

yeah although I think I don't think a majority of black matters stood but yeah he got more than in previous selection.

actively outperform.

But one last thing I I just wanted to say, but that was um about the ohh I do so bits in bets which is another show on on this channel. They did talk about how they felt like you know there was this gender gap and you know i'm pretty short so I don't know the date on polite back but i'm assuming that there is just more military just the way that like you know anybody who is in cyp tu is like more male so I did think um that that also might be why that was and which is not i'm not saying that I was like discounting IT or whatever. I was just saying that for me, part of the gap at least whether or not I was the whole thing or just some part of IT, I did think some of the genders stuff could have been uh, causing that.

I I hear that I respect perspective, but I think this could also go back to the neighbor problem, right, which is Polly market, is that not asking people who they want to vote for is asking people who do you think the electorate wants to vote for? And therefore, I think it's more accurate and I think that has less potential bias based on people's own interest.

Now yes, there's GTA be some correlation between people's own voting interest and what they think others are gonna, right? And there's got to be some correlation between and work. We know from the data already that there's a correlation between gender and voting preference in twenty twenty four, right? I think we're mikey, some of that.

But I think it's probably you know offset by the fact debt people are weighing ing money based what they think they expected outcome is, even if they think is different from themselves, like there's a lot of Harris voters who are betting on truck. There's a lot of trump voters that we're betting on Harris. There's lot people that were like on life hedging and bedding for the other candidate.

There's like all sorts of stuff that I heard about. And so I think that is a critique, which is the demographic of bets might not reflect the population at large, but I don't know if he has to represent the population at large. Just be scientists enough to figure out what the market thinks the population is.

Well, obviously, IT doesn't because the market for Better is a foreigner. They're not americans.

right? They might that might be Better, that might be more .

objective actually because they're direction, right? Looking from the outside, so many people I know who are outside amErica thought the american media was crazy, thinking that this was going to be a close thing, right? Like I was listening to somebody and there was like a bar in paris.

I came over what show I was watching, but there was like a bar in paris that always does IT like a sravasti. The election of american experts. And american like this is a very famous thing in in paris.

And this bar, a trump won the vote in this bar, which is, this is american experts in paris, right? This is like a stronghold of very, very liberal people, and they voted in favor of problem. So there are all these signals that people are outside of america. Like me, I spent a lot of a time outside america. So many people were like, you want to go to win this election?

I don't know what your media talking about. To be fair, I think, you know, I think prediction markets were immediately more helpful on the night of compared to following the T V. And trying to see results were coming in.

What models were saying. I think obviously playing mark was giving a new sixty a shots versus fifty years shots for most of the modeling. Um but you climate could still had trump t like twenty five percent to win the the popular vote. And so it's like give a IT for the first.

I will push back on that. That was a one that's a much smaller market than the presidential election market is also the market that doesn't matter and it's the market because you know who cares who wins the popular vote? No, nothing changes based on that. And also, you can't hedged IT. You can hedge the actual presentin election because there's a bunch of other stuff in the world that is Price based on whether trump is gna win, but there is nothing that Price based on who wins a popular vote, right? So you can construct a basket yeah I mean.

you are still talking tens of millions of dollars in volume. So I wanted it's nothing but fair enough on the hedging. But also of the macro trade has been flipping back and forth, right?

Uh, like people say, oh, it's like a strong dollar. Now it's a weak dollar and now it's like use this lying off. So I see the colleges still the biggest one. And you also, to be fair, poyet has been trading roughly in line with a lot of other prediction markets um like forecasts x like cali. So even people in the U S。 Or of you still uh you trading a lie with with foreigner are looking at even if foo nu are slowly more uh you accurate trump st.

Yeah, but I think in the day was he was basically like one of the size of the president's market. And so people are time with, well, the president's market really liquid enough. You will really take this market seriously, definitely can take a market that you know roughly a tenth to be as meaningful as the text speaker market, especially when there is no real like, if prompt won the electoral college and not won the pope, vote republican. Sicker, sweet there. Still, there wonnell's ily be any change in the world that is discerning other than just okay now you know the democratic party is much more humble LED now than I would have been had they want .

the the popular though yeah I mean that all comes back to just it's a incentive aligned design of how this is works as a market. Um I bet next year is over back and and service will be back. And like you are not going out of a job because they fucked up this cycle. And wherever you last thirty eight dollars, you might be you might not be .

coming back next cycle. So like markets have at our incentive stand, pollsters full.

yes, absolutely full stop. That is the biggest lesson is that you know nobody is losing a job over having miscalled this election like what polestar are going to be like. Well, great out of business now i'm not coming back next year, but any Better who was you know gambling their life earnings on combo winning, they're out.

They don't get to play again. And that is in a way that is the ruthless efficiency of markets is that if you are wrong, if you are not adding alpha, goodbye, you do do not pass go, do not collect dollars. And that's why mark work.

You have worse incentives, right? There's this paul heard hurting where you don't actually want to report the raw inputs. You want to have a poor result that looks roughly like everybody else. You don't get called out and then you get these new garbage in garbage out kind of results with with rational modeling.

So yeah there there is the delta between the two Prices. And then as you mention, tom, the fact that poly market was way faster to call the election than the main media. And you know I harp on this quite a bit in in my piece, which again, if you guys even see IT, please please just give me to read um basically was like by midnight, polymer was pricing the election at ninety seven percent.

The trouble is gona win IT like he was basically over and the mayoral media was just milking this thing all night, like six hours of, like, just false drama. Oh, no. I know H M sbc wasn't .

calling a single race like a single state like state. They were like everything the same. I know yes.

Well, yeah I know I am always in apologize for the media, just need to explain that. So the incentive provided media are you don't want to get things is wrong. So I know like when it's trending and that seems so obvious, but like if theirs like some margin of var, you know that I can't member that I must of their elections in the past when they've things you early and then they were wrong. And so like yeah the incentives ves are just like so completely different.

So I I get that I get that. So just the odds on the screen, counter votes wait until it's like a sure thing, but just put the odds on the screen to the people are not misled.

agreed. I thought I was way more misleading for them to say like, oh, only sixty percent of the vote is counted and like there's a six percent gap like we can call this, you know, when any statistician would have called that in. In fact, many other venues were calling states like decision, decision that was calling the states relatively fast, right? That's a very efficient source.

You know, IT was just the accents are broken because they need viewers, they need eyeballs. And I think for a lot of these networks, they want to convince the audience that they're on their side, right? These are somewhat parties in get out networks and get out, they sell the old story. And so I don't think you a real time factual accuracy is in their business model. I completely agree.

And I think a big part of IT is, of course, the election. I mean, the election is like a super bowl. You know, it's just such a big event, so many eyeballs, so much energy and attention that like it's it's kind of there's a lot of agency.

So there's there is a big spectacle. And the spectacle, we all were coached by the media. What to expect? There's seven swing states. We have to wait until pencil lying is called, done that. And where party showed was that the polling error was so big in even non competitive states that had already called the states by and by, like eight, nine P M, like new york, that like new york, like florida, that there was no fucking way. There was just absolutely no way with a polling air this big and IT across all the states that the swing set were could be close, like IT was basically done before a single swing states was called and the media could not explain people like it's just not in their business model to tell people guys. Here's a subtle statistical argument for why the elections is over in commons lost even though a single since has been called because there's just like this kind of beautiful sense of process that the media has sward here to because this is what they sold to their customers.

No, we have to. You guys. I don't have A T, V. So, like, I did not watch this in the .

way that noral I like in .

my entire life.

Sorry, how are you .

consuming this content? Um well, I do. yeah. Well, super fall, you guys. I had a class like, I take this writing class. I had a class, so I was like, not I pay attention for, you know, until like ten P M.

Then I like fell a sleep and then I woke up and I like, oh, I guess I guess she's losing so yeah no, I didn't have like a watch party ever whatever. So anyway, so you're asking all the questions and I did not experience that the way in oral person did. But all i'm trying to say is, so you're describing all listening like, oh right right I I remember what TV can be like but yeah I I persons don't know I .

think this is what i'm hoping is that this is the moment for american population to really understand why prediction markets matter and why they are Better ways of understanding what's really happening than the media. Now obviously, as you mentioned, Laura, there is a sync oic relationship between prediction markets in the media but right now it's a one way street and what i'd love to see you where to become a two way street right you saw um you know you on mask and you know bunch of politicians quoting the polymer dots in the ninety election.

There was also a story that uh shame the founder polymer was saying that the trump campaign calling him, telling him that you thank you for a polar market because it's helping us understand what's happening because we're watching the media, right? Like I mean, you know, all their polling is done. They are not doing anything anymore.

They're sitting and watching and the media is just basically bullshit, right? There's just lying about what's going on in in the country. They're pretending that is close with in reality, trouble is overwhelmingly favor to win. It's pretty much over um and that was helpful for people who are actually in themselves in the race.

So I think this is a moment that like all the other ways in which there has been a chastize ing of the media over the over basically the last four years, um I think this is another thing that is going to raise the legitimacy of prediction markets has been an important tool for understanding the news and understanding world events um and what I hope to see is that that trend is going to continue little bit more is that you'll see new stories quoting policy market ods or quoting prediction market ods and saying, you know, for something like, will there be an invasion? What's the likelihood that you know this thing is happening? That thing is happening instead of reading some of bed from the journalists like doesn't want to know, which is kind of guessing based .

on their views, I just .

really happened.

And at the time article it's I basically read the letter to the democrat and liberals telling them that they were being stupid about cypher and um that I was putting the U. S. At risk of losing its place and like the leadership of the world so .

well let's dig let's dig on dig in on this topic because you know like this about the other major story from this election is that the democrats were being done on critical and IT did cost them many elections up and down the ballot in some degree. And so yeah .

honestly, I actually just want to like yeah talk a little bit about that right now because interestingly, after I published that so many people in crypto, like prominent people in crypto, came out of the would work and privately message me and told me that they agreed with me and they were democrats or liberals and they don't understand how the democractic party can be so anti cypher. So i'm clearly not the only person who feels that way and um and I I ve had like a lot of private conversations now and um you know so for any any democratic politician who is like listening right now, like please pay attention because those of us cn crypto who um have that political leaning we are just minds are a blow. We don't understand how um our own party or like people that we believe have the same political values could be against the technology that we view is being totally in line with our values.

It's so confusing so like um you know i'm going to fully admitted this is not going to a popular opinion um but when SHE ran Alice with warrant was my favorite presidential candidate and I truly thought that cyp do is like exactly what like what he was talking about in technology form and so when he was against that I I was like so confused I was like, how does this make sense? Like this is what you used to talk about your campaign, but we can like do IT now using this technology and yeah like multiple other crypto to people who also used to love her. They also were like, yeah, when he started being against this, like didn't make any sense to me because I used to support her.

I believe this technology can accomplish the goals that he had said he wants to accomplish. And so anyway so yeah there like i'm i'm very except with my party on multiple things, but. I am just realizing there there is multiple issues now where um because I you know aligned with what are you know some things on that issue, I find myself with like other kind of protruding b right wing people in communities even though uh for any other issue like I don't online with the republicans or or you know the people on the right.

So it's so confusing and I feel like um basically what has happened is that the democrats have become like very self fighter to spend a lot of things in super superior and they like immediately will have a neeter a mocking reaction to a lot of things and they don't they have lost some like intellectual curiosity because they just have this sort of superior already complex and it's really aggravating because you know just like I mean, as a really simply example, I know we wanna keep IT descriptor. I'll just say this really briefly and move on. But like I also know a bunch of crypto people were pro R F K.

And you know people in the last days of the election like mocking the notion that R, F, K. Had anything useful to say about health. And I mean, guys on there i've been dealing with like crazy health stuff. And if I had not experience things in my own body, I probably also would have been like one of those people mocking what he was saying. But no, he he's on about a lot of things, a lot of things.

And it's only when you have bad health and you like have to go through some crazy ship to like, get your body out of IT that you realized like, oh, oh no, he's onto something and that would be beneficial to have a point of view like that in government. So anyway, point is just like yeah with cyp to health. I mean, there is like numerous other issues, but I just see IT over and over again.

And I think part of IT has to do with like that whole woke whatever the identity politics thing which just trucking drugs nuts and um I feel like it's like a big part of that whole moral superior orality complex that the democrat have and I feel like they to you eat this humpty e and like take a look at what their values are you know nyborg m is another one. Just there's just so many ways where I feel like the democratic party has veered from their liberal values. They may obviously on some of the big ones, which is the why is still voted for a democrats, they happened.

But you know there are certain other ones where i'm like what you guys are saying, that's not even a liberal position. And now the don't like the health when it's like these right way. People are pro the party that has been trying to take away health care from people for over a decade. And just like make IT make sense, make IT makes sense.

Well, I mean, this election really showed exactly what you just said, which is a massive repudiation of democratic party across both, well, the presidency and congress. So republic is in our control house and senate. And if you look on the gypt to side, so uh stand with crypto was tracking the uh the races, which of course in the fertile pack was a big contributor to the successful, a lot of procrit t to candidates. There were two hundred fifty eight procrit t to candidate elected to one hundred sixteen or antigen pto senate, seventeen procrit to were elected to twelve anteco pta IT basically was a big loss for the eliza warn wing of the democratic party, right? I think I think if if if we're going to imagine with how the .

cover or revolving this and .

herself didn't yeah yeah yeah yeah but I think but I think her status s in the party has massive vely decrease now with this election, right? This was very, very clearly a complete repudiation of the far left, of which, you know, who's with orin and c are probably the most striking in bodies and their sway in the democratic party will absolutely decrease of the next four years.

Now I heard many people saying, like all of trump ins, it's going to be a revitalization of voguish. People going to really, you know, like because because trump is just such a an odious figure and people going to want to push back against him. And like two thousand and sixteen and twenty twenty, that was why world cultural rose was because of trump.

And now the trump is back, it's going it's going to have a second wind. I think it's the opposite. I think it's that people have realized now voguish is not a winning strategy like the sucks voters don't like IT. You will just keep losing the more you .

embraces yeah but I can't believe I took them this long absolutely because .

it's just it's it's hard to tell when you're in this echo chAmber of like this just you know left eating the left about everything when IT comes to identity .

politics yeah so think this .

is not a politics podcast at the cypher to podcast but just, you know a thousand, not further. I grade to speaking from personal experience as a lifelong democrat like IT has been difficult to watch the party get more and more average hour and he tonight ing toward voters of both parties over the last couple election cycles where it's like taking for granted the majority of americans, it's taking for granted most ethnic groups it's like and it's so condescending towards, you know trm voters of the republican party at this point that is alienated me right as an individual from the party and like it's a kAndra because it's a party that I still remember of and you know, I have always voted for our hopefully this is and i'm speaking again as democrat, one step forward.

There's like one step backwards, two steps forward for them, right? But they are wrong on crypto, the wrong on a lot of topics, the wrong on this, yeah, every tower nonsense. And hopefully they will learn from this.

Cro is a good example of that in that, you know, if you, if you like, how does the democratic party view crypt? Or at least how did they until, you know, yesterday, basically, I think the answer is that they view IT as, look, this is basically gambling, and people cannot be trusted to make your decisions for themselves. They're too stupid.

They are gone to buy, mean, coins are going to buy bitcoin big in a scm. I don't believe bitcoins a good idea. Therefore, people shouldn't allow to buy that. We ve got to protect them.

Mixed with a one diagram overlap of like being an anti tech party right now, like for whatever reason, the democratic party used to be about like championing you do new things and growth and innovation, and for some reason took .

at .

the problems they .

took .

this like regressive detail to be like, okay, google women up in and has to be broken up. That's literally one of like the major views within the democratic party right now is that tech companies are out of control and too large and the parties becoming anti tech. And it's not just crypto is only used for like speculation. It's like it's like cross spread with tech and like the combination of those things, I think is like creates for some people within the party in large reaction.

Yeah, but this is so my copied. And this is what I wrote about the time piece because, like, you know, how many people have I had on the show who were like, oh, I live in, you know, like afghanistan and this helped me know what this were that or like, you know, i'm i'm in africa. I'm an, you know, whatever there's like, just so make IT like, like basically the democrats only view IT like within this bubble of, like how we live in the U.

S. And oh, but you know, we have good thinking. Like, what do you need bitcoin for? N it's like, yeah, well, you're lucky you live in this amazing country, but there aren't people that live in this country who could really use this. And like, how did they forget that? Like, that's why i'm like you're you're just a engineer, your progressive ideals.

I do clearly agree that, but I think the the core of IT was really that they didn't want americans don't this and I don't think he was because like I we're worried about the dollar or worried about this, is that if is just like IT was kind of stupid, that the democratic ty just decided one day, basically two years ago, that crypt u was evil and that I need to get stamped out and like this, this is the here you are going to die on there was a tweet by just a slaughter for paratime who said he was speaking with a former White bind White house staffer who the quote from the staff er was, no dams are gona fight with gypt anymore cyp t to clearly has more staying power than we thought which again is like this humble pie that just like people want this, leave me alone. Do like, stop trying to second guess what people in amErica want. You'll tell you what they want.

This is what I read of my time piece that yeah because, like I said, like being against cypher is like being is like singing against the internet. Who was against the internet? Like IT does? IT just doesn't. You can make .

IT a very small number of people, and history prove them wrong very quickly. And luckily, I didn't really become part of either party's platform because that party would have been ridiculed for probably decades.

Yeah, it's just stupid. It's just stupid. Like we're gona have this. It's gonna a thing you guys like, let's embrace IT that. Like, yeah, I mean, this is, this is why wrote in the time piece.

This is why I wrote the time piece, and this is why i'm all agitated, because I feel like their stance puts the U. S. At risk of falling behind as one of the leaders in the world. And not like is not to me and it's over these like stupid, you know what just judgements they have their very just mental now.

But I I think it's also because, and you know, this is something of like coming dance, like narratives. Policymakers in D, C. Only hear small sound bites of critical good and bad, and it's not often times part of a larger conversation of what is a good for a while. And you know I think if s society we are having more conversations about like what does that mean for amErica and why you know the narrative was very quickly shift. And I think there's a lot of folks that would view this as a tool for our own economic security and dominance. And that like uh, significant you know facet of the american hydrometer you know exception alist system is that we're going to be the best economics, we going to the best in new technologies and we're going to export our, you know, monetary superiority everywhere we can and to shine an industry this at the forefront of how money works, how financial assets work, how you know, assets move throughout the world. IT would seem foolish to sun this industry.

Yeah I mean, like we dominate in tech and financial ready, like why would we want to lose that edge? Somebody please explain this to me.

The rest of the world wants to win this.

You know he's say actually I I think the study where you wants to take, which is that I think the entire to stance would make sense to me if they were coming from a perspective of we need to maintain the monopoly of the dollar and we are afraid of bitcoin or other critical currencies usurping that monopoly. But that was not the language that was not the rational e, the rational was crypt o is a sm and we're going to protect you from the scam that was a rah is like, what are you talking about? Like.

not just that. Not just that. I was also, this is only a tool for drug dealers, money long s and .

and a bad dudes because .

that is a soundview that was accurate circle at twenty eleven when a lot of people heard about this for the first time. It's not accurate in the thirteen years since that, but cr to two thousand and eleven IT was pretty much exclusively for bad people. Sorry to say that if you're in great right?

So there there is there is a real politic that like actually makes to me makes more sense to come from the right is to say, no, no, no. This is a national security slush dollar dominance issue. And we want to ban crypto or ban bitcoin the way that china is, right. That it's not inconceivable that this could be in the national interest, but that that was not the reason why they were anticipating to, they were anticipating to for this like whole year than the reason that like we know we going to protect you from how stupid you are.

And then uh if if you look now like the the republican party now coming into complete control of basically the american government um the american the right is just kind of broadly and tight, right that's kind of mega populist and narrative which is that, oh, you want this here you go. Have IT, you know you you want to get on min coin's great, Better on inquiry. You want to trade and reduce care to get to go head fucked like one that I don't care.

Um and so I think we're going in for a very, very big sword in american politics. And curious how you guys think this is going to shape up, right? So we now have the self proclaimed crypto president who's gonna office h early next year.

He has said that he's going to fire gary ganzel. Er is going to completely overhang the regulatory state. Uh the rental you on musk uh and jd vans were both very programs to are going to be kind of suda running the country or running some part of the total platform.

And you trump himself has massive economic interest in cyp du know from world liberty finance to his nf to his the amount of current he owns that you I think ARM tag a lot of his addresses on chain um so he is really genuinely the first script president ah and he's proclaimed that you know treasury y he's going to hold some big point of the baLanced now so we are going to see the first, the richest country in the world, the own bitcoin presentable if if he in fact, that fulfills this. Um where do you guys think this is going over the next four years? What do we expect to see?

Honestly, this is like one of the only thing i'm about. It's like this and the health thing i'm like, okay, the republicans were Better on those two issues. So like fine.

I mean the markets already kind of showing you a little bit what he thinks, right? Like um a lot of the sort of O G D five tokens were ripping yesterday.

I think L D O .

to lito. Um so people are viewing, hey, these are things that um either have been targeted by C, C or are likely to be targeted by c the gandle regime. Uh maybe this can be a more a loose state under a truck presidency um republican and so uh the markers are all optimistic about um a more favorable regulatory I just more accepting and more a lots of hair around these kinds things.

And so um I think we're hold on that. I think the world liberty thing I think maybe is this on a previous podcast that you know obviously is that a lot of difficulty selling out uh or doing this this foundation and the trumps out and story yet today of our liberty finance token in since struck on. So that is very dead.

Wow, wow.

I I actually saw witter was twitting last night shot .

up .

right now.

Yeah .

wow.

yeah. I mean, i'm looking forward to um just like there's so many common sense things that should have happened before that finally will get you know like regulation um you know probably like an either etf with staking, just you know just like so we need things that you should have happened um so i'm like looking forward to that and I just feel like you know what I was saying before, like genre.

I mean the reason I cover cyp, I think it's obviously super interesting yeah you know I would think before like just any technology you can do good or about with IT, but you know buy a large so the internet is another great example you can do, but good about with that. I would say most people would say IT has been a net good. And I feel like if we allowed crypto to develop over time, people will also say that. So I am happy that yeah, we'll move forward. And just some stupid things we should have done like five years ago.

So okay, to make some specific predictions are some things I think are probably coming down the pike relatively like within the next year. So one, we're going to get more etf. So probably, I would guess, X, R, P and soul or next in line to become etfs.

I was starting with somebody about this through the day. I don't think we're going to see a dole G T F. I think like E T officials were just be too embarrassed to do a dole G T F.

Um but in principle point somebody we will do IT, but probably none of the major um etf companies will will do IT to tf. Uh, I think we're probably going to see inside redemptions. Like you said, Laura, are going to see taking a we're going to see a new income and S, C drop.

A lot of these cases, not all of them. I think some of them will will continue, but I think most cases will get dropped to get settle for some nominal amount. We're probably going to see some is a one.

We're probably to see some like new cent stuff come out of this administration before they leave office. So probably they like film more lawsuits, like do other stuff to just like just kind be like fuckyou guys slam the door on the way out. Um and am I guess is that the new in comment? Uh the new uh entering uh agencies have to do some clean up just okay.

You know bungel losses were sent out like right before they left office that obviously are not going to go anywhere. And my guess also, I mean, we saw this with coin bus by cobs opened up thirty percent today. You know, in addition like fifteen billion dollars plus of market cap that was added to point this.

I think what we are going to see is many, many more us companies and institutions on boarding onto crypto um both in terms s of etf and in terms of directly with something like combo is huge beneficiary of this whole process, which I think that pulls some of the energy from black rock and golden. And some of these traditional financial guys we would basically been acting is intermedia is like i'll protect you from the dicing ss of cypher you you can go through me and like you know the critter brows you know to ever get knew them. Um I think some of the value of that inter mediation has gone down now people will be a lot more comfortable going directly to coin base, are going directly to these companies once these losses get dropped and there's more regular ory clarity.

And we probably see some kind of massive legislative package, uh, that gets seriously worked on within the next year. I don't know we see anything past within the next year, but there's gonna be much more sweeping stuff that is now possible with republicans basically you know having swept uh, the U. S. government.

Yeah I all echo and see if everything you just said, I ree with your forecast, almost like to a tea. You know, the one thing I want to stress is that, you know, because so many process pto candidates, one office in the house and the senate, because the republicans currently control three branches of government, I think this is finally when the dam breaks, we start to see legislation, right?

Forget about the regulatory structure, when we start to see stable coin legislation, when we start to see market structural billers, when we start to see tax bills for how this works, like when we start to see all of these things are define and and trying during the U. S. I think that begins in two thousand and twenty five.

And there was a lot of momentum at the Taylor of two, two thousand twenty four of this year. IT cooled off headed into the election because everybody is taking this wait and see approach you know the democrats thought that they could win more negotiating leverage you know whose election the republicans no had to eat IT essentially um without having by parties support taxi move something through the senate. But fit twenty one came close, b one twenty one repeal came close, your civil coin legislation came close, like all of these things came close.

And there's a lot of momentum to get them done and to get them done right. And now I think the republicans have the motivation there. Quite a few members of the house and senate that are extremely excited for legislation across the finish line here. There's going to be distractions right there is going be you know baLance IT like just going to like the budget and like passing a budget, like all these things that continuously play our government. But like when IT comes to legislation, you know I think this is going to be for sure a major part of the two thousand and twenty five session.

Yeah and honestly, I am really excited because um I think we will start to see more cyp to companies and projects come back to the U. S. And I already saw I think you guys pretty saw alex. Uh I don't know to say his last name um the names and .

guys fun um he .

I guess didn't get his like residents he or something in singapore. And so he said he wants to bring nance him back to the U. S.

Um generally I think I would be really a know. I like the reason I wrote the whole time thing is like just as american. I'm like what the fuck we're losing where IT it's like we're going to be like blockbuster. Um so yeah, i'm excited to be us for us to be leaders on on tech again. Yeah might post .

I might from shelling I posted the same thing was that he just yesterday created a us uh, company for his start up. Where is before he was avoiding the U. S.

As much as possibly could like everybody has been playing these like ridiculous games of trying to avoid the U. S. Nexus just because the U.

S. Has been so hostile to cypher. And yeah I mean, I I think this is A A great moment for crato. I mean bit coin's at altum hires, obviously, the jubilation in the market, everything kind of ripping upwards. And I suspect that as we start to get more clarity on what this actually looks like right now, people sort of imagining um of what this is gna mean, but we don't know what the cabin is gna look like.

We don't know what the agency has gonna look like and are probably over the next two to three months, we're going to get a Better understanding of what the trump team is actually going to be composed of. But one way another, this is a really big vindication for crp to like the unequivocally um crypto spoke in this election and IT wasn't the main wasn't wasn't the main speaker above y there's a much bigger mid narrative going on across the country. But the democrats really fucked up in large part or not the last part in small part, by ignoring crypto and thinking that this constituency didn't matter.

Is the only thing that Harry said on the campaign was that we're going na protect black man script invests, right? That there was literally the only thing he said on the entire campaign otherwise ignored that and felt that he was just beneath her to give any kind of specific policy proposal about what he was going to do in office. And voters, I think, very fairly punished the complacency of that approach to to this industry.

So yeah, it's going to be a crazy for years. Obviously, it's going to be incredibly stupid. And you know there is gonna be all sorts of incentive ship going on in the media and from prop and in whatever.

I mean, I don't know. It's going to be bizarre. And in general, I am not a fan of a unified government. Um I think like divided government is generally a good thing and it's a big part of the reason why we have so many branches. So they check each other.

And I I personally you know, although I am obviously very procyta and I think you will be good to see some crypt legislation go through, I am a little bit worried about what happens in a government where there is much less need for compromise. I think in general, that's a that's a that's a very important check on the ability for a government to actually respond to its constituent, to actually be good stewards of the country. So um the ping said, we're here now. We have at least two years of republican control over basically everything and we'll see how that plays out.

Yes, the only the only a counter argument I will give you is that sometimes the compromise bills have so many arbitrary concessions in order to get them done that they lose their light elegance and their saturday, right. Like there's you know within the cypher bills that have been proposed and marked up, you know if you've watch like the public conversation about them, they have always gotten like worse over time for the most far or it's like, oh, here's a bill and then like as part of the concession processes, like but not for minors, if they haven't done ex in all, like whatever this and like they lose their you know effectiveness. For my thing.

for cyp to completely agreed. I am very, very happy that for the critter industry, it's we're going to eat rich, but there's obviously a lot of stuff that is going to happen in the next two years that I think the that is what I more worried about just as a citizen rather than as a as a as crypto dude yeah this .

is what I like people keep asking me on twitter um like a lot of people took a SHE with the fact that I voted for Harris and in a democratic stuff and i'm like, you is like there are so many issues to vote on like yeah cyp tit was not the thing I was going to vote and sorry, just I wasn't a lot of .

people did I know like and maybe it's because we're in this like echo chAmber world but .

like I know so many people who was the .

only factor in their vote cypher was yeah okay but i'm monico yeah yeah I wouldn't say .

that they are maneuver. I mean, they're looking for their own job. What else farmers vote for? People who are good farmers and you know, people who work in manufacturing care about manufacturing.

So it's again, like the country spoke like very clearly. The biggest thing was the economy in the border, right, which is like these are very mean potatoes issues that the democrat lost on. It's not I mean, the obviously the hyo luton, you know Walkers m stuff like that mattered.

And IT puts a lot of people off and alienated a lot of the party. But the main stuff was is pretty obvious, you know and I look, I don't know that trump is going to deliver any of the stuff that he said he's going to deliver. Um politicians, I think we have a lot of magical thinking about what they can do and what they can do. And um I think we attribute responsibility and blame a little too easily to the president for what is ultimately a very complex emergent process which is you know a country of hundreds of million of people.

Yeah but I I wouldn't call him a typical politician. I I would say if he doesn't deliver IT because he's not the kind of person who would genuinely keep the word that's just my opinion. I know people might be made at me for saying that.

but just look at his history so I guess now um we've got a great totally for two in the coming year of seeing how this pro script o amErica is going to look um what policies and what leaders are going to be put in place and what regulators are going to be appointed and and lastly, how markets are going to react as they know continue to ingest what this new world looks like. So um to good tend to be encysted uh real to how you feel about you know american politics and we're very happy to be you are helping you guys understand what's happening in in this new .

world yeah and if you're crypto entrepreneur, come back to the U S.

Right and right, right with that signing off. Thanks, everybody.

everyone.