Crash My Crystal Ball

Post-election hangover, wild bets on world leaders' outfits, and the latest markets that made us say, "Wait - you can bet on THAT?"

Author

E
August 20, 2025 • Estimated Reading Time: 5 minutes

🌟 Today’s Edition

📉 Post-election markets swing

🕴️ Fashion bets that cost $240 million

👽 E.T. phone home: there’s celebrity drama

🔥 Alphas in crypto ETFs and recession odds

📉 Big Swings

The Post-Election Hangover

Remember when prediction markets called Trump's victory? Trump’s win didn’t just validate the markets - it changed the game. Polymarket ran over $3.6 billion in election bets, while Kalshi hit $30 million after getting the green light. An anonymous French trader hit gold with a big bet on Trump - walking away with $85 million - turning political forecasting into the world's poker game.

Trump's win didn't just validate prediction markets - it changed the game entirely. Pollsters baffled and bettors pleased, the post-election honeymoon is over. Polymarket and Kalshi user downloads have dropped over 90% since June, suggesting that even avid traders need a break from the excitement.

The Zelensky Suit Debacle: Million-Dollar Blazer

If you thought crypto was volatile, wait until you hear about the great suit controversy of 2025. Polymarket asked, would Ukrainian President Zelensky wear a suit before July? When he appeared at the July NATO summit wearing a suspiciously formal attire, chaos ensued.

While multiple outlets called it a suit, the market was ultimately resolved as a "no.” With $240M in the pot, internet bettors revolted, criticizing the platform’s dispute resolution process. Even Derek Guy - Twitter’s menswear expert - was asked to comment.

⚠️ Careful to consider subjective outcomes! You’re betting on the mood of the mods.

👽 Weird Markets

Where Aliens and Swifties Share a Bet

The intersection of viral moments and financial instruments is a growing trend. We now have prediction markets born from Taylor Swift’s relationship to the Coldplay kisscam drama. Now you can put real money on your group chat!

Prediction platforms are trading odds on whether the US government will announce alien existence this year. Well, why not? Current odds are at about 5% - the highest at 21%.

For those invested, Robin Hanson breaks down the amount we should allocate to researching UFOs - so you can profit if ET drops his EP.

🔥 Potential Alphas

Crypto ETF Mania Round 2

If you thought Bitcoin at $100k was hot - catch this next wave of crypto ETFs. Crypto has entered the traditional market with assets that your pops can buy from his brokerage account. ProShares, a pioneer in crypto-linked ETFs, recently launched ProShares Ultra Solana ETF (SLON) and ProShares Ultra XRP ETF (UXRP). If spot Bitcoin ETFs were the seed and Ethereum ETFs were the sprout - our garden is growing!

🤔 Look for prediction markets on which crypto gets the next ETF approval.

Recession Odds Deflate

There’s a curious divergence between prediction markets and traditional economic analysis. In April, following the announcement of new tariffs, Polymarket saw U.S. recession bets rise to 60%, with Kalshi matching odds at 61%. Since then, these odds have declined to 12% and 10% respectively. Meanwhile, some traditional economists are still wringing their hands about tariffs.

🤔 Trump's tariff threats are mostly negotiating tactics. When push comes to shove, he's mostly measured. Bet on continued economic growth, especially with the AI boom creating new wealth faster than trade wars can destroy it.

👋 The Bottom Line

The real edge is no longer just in predicting outcomes, but in understanding which markets attract attention and liquidity. In a world where speculation abounds, there’s great value in the ability to discern narrative from fact, and in betting on the clarity of the market, in addition to the outcome.

The weirder the market, the bigger the edge. When mainstream media starts covering your bet - it's time to pull your profits.

Till next time,

O2

Please do your research before betting, trading, and daydreaming about aliens.