NEW YORK / LONDON (IT BOLTWISE) – Recent developments at Coinbase show how speculative markets can be driven to absurd heights. Trading futures on the mention of certain terms in company calls raises questions about the state of financial markets.
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In the world of financial markets there are always developments that surprise even experienced analysts. One such development is the ability to trade futures based on the mention of certain terms in the quarterly reports of companies like Coinbase. This practice offered by the Kalshi platform raises questions about the rationality and usefulness of such financial instruments.
Kalshi, a recognized commodity futures trading platform, specializes in offering contracts for unconventional commodities. This includes not only traditional raw materials, but also events such as election results or sporting events. What is particularly curious about futures trading, however, is the mention of terms such as ‘Bitcoin’, ‘Web3’ or ‘Prediction Market’ in Coinbase’s quarterly reports.
The probability of Coinbase mentioning the term ‘Bitcoin’ in one of its reports was recently 92%. This seems logical since Coinbase, as a leading crypto exchange, is closely linked to Bitcoin. What is less obvious, however, is the logic behind trading terms like ‘Web3’, whose probability was only 15%. This shows that the hype around Web3, which peaked in 2022, has now died down.
This type of speculation raises fundamental questions about the state of financial markets. Does it make sense to bet on the mention of terms that may not have a direct impact on company value? Or is this a form of gambling that has more to do with entertainment than serious investing? The answer to this remains unclear, but the existence of such markets shows how far the boundaries of financial innovation have now been stretched.
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