Prediction markets today is a duopoly led by the two biggest market makers Kalshi and Polymarket, both of which has seen explosive growth. This past week, Kalshi closed a series E that values the company at an $11 billion valuation, more than double of its last valuation just months ago. At the same time, Polymarket is also seeking a $15 billion valuation after being usurped by Kalshi as the #1 player by trading volume.

The U.S. presidential election last year was the catalyst that triggered the industry’s hypergrowth. Crowd-sourced, real-time predictions offered more engaging and often more accurate signals than traditional polling data which were outdated. Since then, prediction markets have expanded to cover a wide range of topics, from sports to culture to global news, becoming an increasingly mainstream form of betting. With sports in particular, prediction markets present a direct competitor, and often a more engaging alternative, to traditional betting from operators like DraftKings.

By charging a variable fee of 1-2%, prediction market operators function essentially as brokerages, where trading volume is the primary driver of revenue. It is no surprise, then, that competition is emerging from platforms that already own distribution and user bases. Robinhood, who to-date had partnered with Kalshi to offer prediction markets on it’s brokerage app, announced a joint venture last week to build it’s own exchange for it’s fastest-growing product line. Meanwhile, crypto exchanges like Coinbase and Crypto.com have also begun offering variations of prediction markets on their apps.

From hereon, it’s a race to the finish line on growing user acquisition and trading volume by building new markets and tapping on channel distribution. Kalshi for example, recently signed a deal with CNBC to be its exclusive predition-market operator showing real-time probability data onto the network’s platforms. This comes days after a similar deal with CNN, underscoring the company’s media distribution strategy.

The industry is not without its flaws, most notably it has limited ability to prevent insider trading. Take this example of a user earning nearly $1 million from correctly predicting nearly every outcome of Google Search trend markets. Or the time where Coinbase CEO Brian Armstrong trolled markets by rattling off 5 words during the company’s earnings call, illustrating the ease and dangers of manipulation.

I personally believe that this represents the future of consumer betting and polling. Even in it’s current form, the industry is still very young and has much more room to grow, especially in the SEA region where prediction markets have yet to truly break into the mainstream.

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This week…

• 🇯🇵: BOJ is expected to raise interest rates in Dec to 0.75%, but with markets already pricing in an 80% chance of a hike, this is unlikely to trigger another round of Yen carry trade.

• 📺: Netflix acquires Warner Bros. for $82 billion, the expected to close in 12-18 months.

• 👾: Meta is reportedly reducing its Metaverse spending by up to 30%, lifting its stock as it continues to rebound from the Q3 earnings dip.

• 🤖: NYT sues Perplexity for copying and distributing its articles without permission, as publishers continue to battle against tech companies.

• 🇨🇳: Share of China’s “NVIDIA”, Moore Thread, surges over 400% on it’s IPO debut as the Chinese government continues to push domestic GPU makers.

Before we dive specifically into Stablecoins, it’s important to understand the fundamental concept of asset tokenisation. This refers to the act of creating digital representations (tokens) of financial assets. These tokens represents partial or full ownership / right to the underlying assets which can be physical or financial in nature.

In theory, the underlying assets should be held by a custodian while the tokens are distributed to investors who then trade these on a secondary market, with transfers and verifications facilitated by blockchain technology, maintaining an immutable and transparent record of all transactions.

Now moving on to Stablecoins…

The need for a stable blockchain currency

To serve as a medium of exchange for blockchain transactions, a currency needs to maintain stability to assure recipients that the currency will retain its purchasing power in the short term, just like the physical dollar in the real world. This makes the most famous cryptocurrencies such as Bitcoin and Ether unsuitable as tokens to facilitate transactions and store value, given their high price volatility.

Stablecoins are a class of cryptocurrencies designed to maintain a stable value to serve this purpose. The top Stablecoins today are USDT (issued by Tether) and USDC (issued by Circle), powering over $25.9T in total transaction volume over the last 12 months, with around $196B in circulation as of Dec’24, according to Visa.

How Stablecoins work

Stablecoins maintain their stability in a few ways:

1. Fiat-backed Stablecoins maintain a reserve of a fiat currency (or currencies) such as the U.S. dollar as collateral. This means that in theory, every dollar of a stablecoin issued and circulated is backed by an actual fiat dollar held in a custodian.

2. Commodity-backed Stablecoins function similarly to fiat-backed stablecoins, but instead they are pegged to the market value of commodities such as gold, silver, or oil.

3. Crypto-backed Stablecoins are backed by other cryptocurrencies. Given the high volatility of the reserve, such stablecoins are generally overcollateralised i.e the reserve value exceeds the value of the stablecoins issued to insure against a X% decline in the price of the reserve cryptocurrency

4. Algorithmic Stablecoins control their supply through an algorithm that often involves creating and destroying tokens based on market demand and supply, instead of backing them with any alternative assets. The infamous Luna and UST is an example of this:

   1. Arbitrageurs would help to keep the price of UST in check. If, for example, UST slipped to $0.95, traders can buy a bunch at that price but swap it for $1 of LUNA. In doing so, UST supply is reduced and, therefore, the price theoretically heads back up.

Business Model

If a centralised currency maintains a stable value over time, how does the company behind it make money? One way is to charge fees for issuing these tokens, but that’s a small pie.

The main revenue stream is to earn interest on the reserve assets that back the Stablecoin. Much like a bank, a company like Tether or Circle can generate substantial interest income. This has proven to be a great business, because as adoption of crypto grows and the demand for Stablecoin increases over time to facilitate more transactions, these companies can just issue more tokens and receive more deposits to earn more interest income.

This may be why even traditional fintech companies like Paypal have joined the party in issuing their own stablecoin - Paypal’s recently-launched PYUSD already has over $1B in supply to date. Meanwhile, Visa announced their platform solution for banks to issue their own fiat-backed tokens including stablecoins, while other fintech companies like Revolut and Robinhood are reportedly also considering launching stablecoins of their own. Payment processing company Stripe allows merchants in the US to accept payments via USDC, and is reportedly in talks to acquire stablecoin-focused platform Bridge.

The Risk

Now imagine you own a company that issues Stablecoin, but you’re a bad actor trying to take on more leverage to earn more revenue, what would you do?

You could take customers’ deposits and use them to issue loans or invest in other asset classes instead of buying the fiat dollars and holding them safely in a custodian account as you publicly committed to. This means that your stablecoin may not actually be backed dollar-to-dollar by a fiat currency, exposing end users (or exchanges) to a bank-run type of risk.

For example, Tether, with over $100B of USDT in circulation, has yet to provide conclusive evidence of full reserve backing in the face of regulatory pressures, fuelling concerns over the impact on financial markets if it fails one day.

Have Stablecoins grown so much in importance that they now represent a systemic risk in crypto as well as the wider financial markets? It remains to be seen if these fiat-backed Stablecoins can withstand rapid outflows when such a day comes. It’s a matter of when, not if.

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This week…

• 🇺🇲: Palantir, Anduril, SpaceX, OpenAI and more are in talks to form a consortium that will jointly bid for US government work in an effort to disrupt the country’s oligopoly of traditional “prime” contractors such as Lockheed Martin, Raytheon and Boeing

• 🇺🇲: Trump seeks delay on TikTok divestment law in the U.S

• 🇺🇲: Trump names 5 picks for Pentagon jobs, including billionaire private equity investor Stephen Feinberg

• 🤖: Microsoft has made Copilot part of its consumer 365 subscription service in several markets and raised prices accordingly

• 💵: Tether Faces Delisting Risks Under EU MiCA Regulation

• 🇸🇬: SGX hits 20-year low in listed companies

Since then, every major tech company has either developed their own models (Meta, Google) or made strategic investments in AI companies (Amazon, Microsoft), providing strong alternatives to ChatGPT. According to Menlo Ventures', Anthropic and Google’s Gemini has seemingly captured some market share off OpenAI this year, as Sam Altman’s company remains the market leader but now with only 34% market share, down from 50% last year.

Competitors are playing catch up at a rapid pace. Google launched Gemini 2.0 Flash Thinking this week, their own version of a reasoning model similar to OpenAI’s o1. Amazon, besides investing in Anthropic, is also working on its own set of AI models and AI compute cluster. These companies have both the talent and budget to innovate and execute quickly, as they see staying ahead of AI development as a key defensive strategy in maintaining their market share of the wider software market.

I wonder if OpenAI will follow the paths of other first-movers in the software space such as Myspace, Netscape and Yahoo, who all failed to maintain their early market share.

It also seems like the price of these models will eventually converge to near-zero, as it has been in recent times for most software services. Meta’s strategic move to open-source Llama, as well as the open-source nature of AI research and development in general, makes it hard for any one model to justify a pricing premium unless they can perform exceptionally better than others. Will OpenAI be able to continue maintaining it’s monthly subscription fee of $20 in the face of dwindling market share?

What’s next for AI?

Shorter post this week, I suggest reading the full writeup from Menlo here on the state of AI in 2024. One of my 2025’s to-dos is to ramp up the use of AI tools in my daily life and be more familiar with this space. Some other tidbits from Menlo’s report:

• AI spending surged more than 6x to $13.8 billion this year, as enterprises shift from experimentation to execution in incorporating AI.

• Code copilots lead the charge as the most valuable gen AI use-cases, followed by support chatbots and enterprise search + retrieval.

• Enterprises have adopted a multi-model approach instead of relying on a single provider, routing to different models depending on the use case or results.

• Agentic automation will drive the next wave of AI transformation, going beyond content generation and knowledge retrieval to tackle multi-step tasks.

Wishing you a Merry Christmas in advance!

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This Week:

• 🤔: What are the checks and balances on the power of Elon Musk? - by Noahpinion, in the face of Elon’s involvement in U.S’s spending bill shutdown drama this week.

• 🇺🇲: Fed cuts rates by 25 basis points but indicates fewer reductions ahead as inflation remains above target

• 🚗: Waymo announces plans to begin its first international testing in Japan in 2025, to gain experience of driving conditions that it has not previously been exposed to. The Alphabet-owned self-driving taxi company is already providing 150k paid rides per week to customers in the U.S. in four cities.

• 🇯🇵: Why Tokyo’s proposed 4-day work week may not solve its population woes - by FT

Tech companies have been looking at nuclear power as a source to meet their growing energy needs. Microsoft signed a deal to restart the Three Mile Island nuclear plant back in Sep, AWS announced plans to invest more than $500 million to develop small module reactors, and Google signed an agreement to purchase energy from Kairos Power’s small module reactors for its AI data centres.

Why Nuclear

On paper, nuclear energy seems like a no-brainer to meet the world’s ever-growing energy needs while combating climate change.

1. It is a clean energy source that does not release any carbon.

2. It is more stable and resilient than renewable energy sources such as wind and solar, as nuclear plants can be kept on 24/7 without being dependent on weather conditions.

3. It is more efficient and cost-effective per unit of energy generated. One large nuclear power plant can replace multiple coal-fired power plants to provide the same level of energy. Compared to other sources of energy, nuclear uses fewer materials and takes up less land.

Yet historically, nuclear energy doesn’t have the best of reputation and it’s easy to see why. Chernobyl and Fukushima comes to mind as the two major nuclear accidents that have defined public perception towards nuclear. The explosions and resulting release of radioactive material have largely branded nuclear as dangerous. A year ago, Germany famously took its last 3 nuclear power stations offline.

What Changed?

Private companies, led by the biggest tech companies mentioned earlier, are leading a transition towards exploring nuclear as a source. For them, it’s about finding the best energy mix that help them meet their carbon footprint responsibilities while also optimising their energy cost and scaling their energy production to meet their electrical consumption. Their growing investments in AI, supercomputers and data centres have only added to this needs. These companies have the budget to invest in the development of this technology, paired with the operating intensity to hold their nuclear developer partners to build and execute.

Countries have also acknowledged the importance of exploring nuclear as a strategic energy source. In July this year, President Biden signed the ADVANCE act into law, which aims to incentivise and support the development and deployment of new advanced nuclear technologies. Singapore inked a deal with the U.S to study nuclear technology, and multiple other countries in Southeast Asia followed suit in confirming their interests in further studies on nuclear energy.

With the right regulatory environment and funding of corporate incentives, clear commercial and environmental benefits, actual development of new nuclear technology designs and improving public perception, the stars could finally align for nuclear energy to play a greater role.

Going Small vs Large

Small Module Reactors (SMRs) have gotten more attention in recent times. These are advanced nuclear reactors that have a power capacity of up to one-third of the generating capacity of traditional nuclear power reactors. The benefits of SMRs stems from the nature of their design – small and modular

• Small: Prefabricated units of SMRs can be manufactured in factories before being installed on site, compared to large reactors which are often one-off custom designs for a particular location, resulting in longer construction times.

• Modular: These can be deployed incrementally to match increasing energy demand in the future, enabling the possibility of smaller power plants with lower initial construction costs and investments needed.

Given how long it takes and expensive it is to build large reactors, you can see the appeal of financing multiple smaller projects instead. While SMRs in principle would be more expensive per unit of power than large reactors, they are easier to finance with lower upfront costs and shorter build times. This enables you to build multiple rounds of smaller reactors, with the commercialisation of each set of reactors help to fund for the next round, and thus providing more manageable financing.

SMRs remains a technology under development. According to the International Atomic Energy Agency (IAEA), more than 80 commercial SMR designs are being developed around the world to target various applications. As of 2024, only China and Russia have successfully built operational SMRs.

If you’re keen to invest in this space, some of companies that are public include and $OKLO. Note that these are all pre-revenue companies that are high-risk investment opportunities!

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This Week:

• 👥: OpenAI reported a new milestone of 300 million weekly active users. The company is targeting to reach 1 billion active users over the next year, as it competes with the likes of Anthropic and xAI, which is viewed as a “fierce competitor”.

• 🤖: xAI raised $6 billion in its latest equity funding round, which reportedly values the firm at > $40 billion. Part of the money raised will likely go towards funding the company’s plans to expand its supercomputer Colossus to house at least 1 million GPUs. This will make it one of the world’s largest supercomputing systems , if not the largest (El Capitan, currently the world’s most powerful supercomputer, houses < 100K AMD GPUs). However, this move will likely raise environmental concerns due to the significant infrastructure and resources required.

• 🏍️: Delivery Hero’s Spain unit Glovo will hire freelance riders as full-time employees, a change in its employment model as the company seeks to avoid further legal uncertainties. Spain’s Rider Law, introduced in 2021, presumes gig-economy couriers should be employed rather than self-employed. This move is expected to cost a 100 million hit to Glovo’s earnings by 2025, as the self-employed courier model looks set to be a thing of the past in Spain.

• 🇰🇷: South Korea’s president Yoon declared martial law and lifted it a few hours later, amidst political uncertainty in the country.

At the same time, Microstrategy (MSTR), a bitcoin-related company, is up over 500% year-to-date. There are even leveraged ETFs that are 2x or 3x long MSTR. How is a Bitcoin company outperforming Bitcoin itself?

What is Microstrategy?

The company’s main business is selling business intelligence (B.I) software. Q3 revenue was $116m, up 10% YoY (As someone who has worked in the B.I space for the past few years, I’ve not heard of any company in APAC using their solutions). With a TTM revenue of $467m and a market cap of $85b, how does a B.I software company command a P/S premium of over 180?

That’s because the company is also the largest corporate holder of Bitcoin and the world’s first “Bitcoin Treasury Company”. In it’s own words:

As a Bitcoin Treasury Company, we plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield.

This is not immediately intuitive, so let’s break down MSTR’s model into 2 components. The company’s bitcoin-focused strategy is financed through a combination of both equity and debt offerings.

(1) Equity

MSTR trades at a market premium of around 2-3x of its actual Bitcoin holdings (NAV). The company uses this stock price premium to grow its Bitcoin per share efficiently by raising equity and diluting shareholders.

• Say the company issues additional equity to raise $100m

• It uses this $100m to buy $100m worth of Bitcoin

• Since the market gives MSTR a 2-3x premium on its Bitcoin holdings, the company should now be worth an additional $200-300m.

• As Bitcoin appreciates, MSTR appreciates even more with the additional $100m of Bitcoin it now has.

The strategy combines (1) NAV premium (2) Leverage (3) Bitcoin appreciation to grow the company’s Bitcoin holdings and consequentially its value, via equity offerings.

(2) Debt

The company raises convertible bonds at a low or zero interest rate. It most recently completed a $3b debt offering maturing in 2029 that do not bear any interest but are convertible to MSTR shares at a 55% premium over its closing price.

What’s in it for these institutional lenders? By having the option to convert to convertible shares, these lenders gain exposure to Bitcoin upside with almost no downside risk since MSTR has to repay the debt in full if they do not convert. The only real risk is if MSTR goes bankrupt and cannot repay its debt, but you would think that there are terms in the deal that protect the lenders from this, such as forcing early repayments if Bitcoin falls by X%.

MSTR’s End Game

For shareholders, MSTR’s strategy of using its NAV premium and access to cheap leverage aims to exceed the effects of dilution by increasing Bitcoin holdings at a faster rate. With its NAV premium, MSTR can raise more funds and purchase more Bitcoin than the dilution would otherwise cause. As long as Bitcoin ownership per share increases, any short-term dilution is more than compensated by the added value of increased Bitcoin holdings.

It feels like an infinite money glitch. Higher bitcoin prices drive a higher premium which allows more equity and debt issuance by MSTR that in turn results in more bitcoin on MSTR’s balance sheet and buying pressure which can drive higher bitcoin prices, and the cycle repeats.

MSTR’s strategy relies on two critical conditions:

1. The NAV premium given by the market remains intact. If this premium is broken, then MSTR should only be worth 1/3 of its value, and the offering strategies no longer work.

2. Bitcoin continues to appreciate in the long term. If Bitcoin falls, then not only would MSTR’s value fall, but the company may also have to sell some of its bitcoin to repay its debts that didn’t convert, which in turn results in less bitcoin on MSTR’s balance sheet and adds selling pressure… i.e the glitch reverses.

Michael Saylor, CEO of MSTR, believes the price of Bitcoin could eventually hit $13m per coin, delivering an ARR of 29% over 21 years. When you consider that the value of a dollar reduces 3-4% every year due to inflation, investing in an alternative asset class that is scarce and not subjected to “money printing” by the government is certainly appealing.

And if the conditions above hold, then for investors, buying MSTR provides much more leverage compared to simply buying and holding Bitcoin directly. Also, in the future when Bitcoin’s price stabilities and MSTR is one of (if not the) world’s biggest known owner of Bitcoin, you wonder what it can do with its reserves (e.g lending).

Bitcoin’s End Game

I don’t think Bitcoin is ever going to serve the purpose of being a “coin” for transactional purposes - that’s the role of stablecoins. Instead it’s going to be a scarce appreciating asset, i.e a digital version of gold. Consider what happens if the U.S decides to build out a Bitcoin strategic reserve under Trump’s administration. Every other country’s government will be under pressure to follow suit - You don’t want to be the last one to the party losing out by just holding cash and gold.

Also, consider that the global bond market is supposedly worth $140t, compared to $115t for global equities and $3t for global cryptocurrency. Can a few % of the bond market flow into Bitcoin (and cryptocurrency)? MSTR is serving as the channel for that. There is money to be made from facilitating wealth transfers.

Personally, I’ve built out a small position in MSTR and will be looking to increase my Bitcoin exposure one way or another. Remember that leverage works both way and an extended bitcoin bear market will most definitely crash MSTR’s stock price - have a look at its 5-year chart.

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This Week:

• 💾: Nvidia reported Q3 earnings that beat analyst estimates, with revenue of $35b and EPS of $0.81. Revenue grew 94% YoY, a consecutive slowdown from the previous three quarters, and Q4’s forecast implies an expected 70% YoY growth.

• 🤖: Amazon to invest another $4b in Anthropic, doubling its total investment in the A.I startup. We’re still early in the A.I cycle.

• 🇨🇳: Xi makes diplomatic push at global summits, positioning China as a defender of global trade order against Trump’s “America First” messaging. Economists polled by Reuter expect U.S to impost tariffs on China of nearly 40% starting from early next year.

• 🇺🇸: DOJ kicks off its attempt to break up Alphabet (Google) by seeking to make it divest Chrome and possibly Android to end its monopoly on Search. The court is holding hearings on the proposed breakup in Apr 2025, with a ruling expected by August. Google will almost certainly appeal, so expect the entire process to take years.

The 10-year Treasury bond yield is the interest rate that the U.S. government pays to borrow money for a decade. It serves as a benchmark for other interest rates and also a key indicator of investor sentiment about economic conditions.

The math

A bond’s yield is determined by dividing its annual interest payment by its current price. There is thus an inverse relationship between bond yield and prices (E.g when a bond's price falls, its yield rises because the annual interest payment remains the same).

The U.S Treasury sells bonds via auction and yields are set through a bidding process. When confidence is low, bond prices rise and yields fall as there is more demand for this safe investment. Conversely, a rising yield indicates falling demand for Treasury bonds.

The situation

The 10-year yield has generally been decreasing this year in 2024 in response to the Fed cutting its short-term rates - the Fed has lowered by 75 basis points this year with further cuts expected in coming months, easing their monetary policy as they view supporting employment becoming at least as much of a priority as reducing inflation. The market prices the 10-year to be what it expects the average Fed rate will be over the next 10 years. Thus long yields should follow short yields. There was also a recession scare in July/August which drove the rates way down (remember, low consumer confidence = higher demand for bonds as a safe investment).

Yet if you observe the original chart above, you’ll notice that the 10-year yield has been rising over the past month. Why is that so?

The main argument is inflation expectations. The market believes that a Trump-led administration will turbo-juice the US economy on debt and bring about strong economic growth as well as inflation. Summers, a famed economist, commented this week that Trump’s policies could bring about an inflation crisis that is greater than the last one.

Whatever the Fed is doing in the short term doesn’t matter, if they end up reversing course in a year to combat inflation again. There are already signs of this with Fed chair Powell recently suggesting that a cut in December may not be necessary. So if you expect future inflation to be higher, you would not want to make a long-term loan at a relatively lower rate as higher inflation would eat into that interest in the future.

Furthermore, if the U.S is to increase their spending to fund Trumps’ pro-growth policies, then there will also likely be a higher supply of long term bonds, which will further reduce bond prices.

The yield curve

A side note here about the yield curve as you may have heard about that term! The Treasury yield curve shows the yields for Treasury securities of different maturities. It reflects market expectations of future interest rate fluctuations over varying periods of time.

The yield curve shape above is considered normal because it slopes upward with a concave slope, as the borrowing period, or bond maturity, extends into the future. The scenario is considered normal because investors are compensated for holding longer-term securities, which possess greater investment risks.

You may have also heard of an inverted yield curve. An inverted yield curve slopes downward with short-term interest rates exceeding long-term rates. This type of curve corresponds to a period of economic recession as investors expect yields on longer-maturity bonds to trend lower in the future. They tend to choose longer-dated bonds over short-dated bonds, bidding up the price of longer bonds and driving down their yield.

That’s enough bond yield concepts for this week. My takeaway is that the 10-year yield can be used as a signal of market expectations around inflation and recession. It does not necessarily follow short-term rates.

This Week:

• 🇺🇸: Trump has named some members of his new administration, including Marco Rubio as secretary of state, Elon Musk and Vivek Ramaswamy in the Department of Governmental Efficiency (DOGE) and RFK Jr for Health and Human services.

• 🇺🇸: The FED does not need to rush to lower interest rates according to Jerome Powell, as inflation remains above their 2% target while economic growth and the job market remains strong. Traders still expect the Fed to cut interest rates by 25 basis points in Dec, but there is more uncertainty now, as reflected in the pull-back in prices of rate-sensitive assets.

• 💰: Bytedance values itself at US$400 billion in a recent buyback offer. It remains to be seen whether the chinese company will be forced to divest / take down Tiktok in the U.S, following Trump’s election victory.

• 🇦🇷: Argentina’s inflation slowed to 2.7% in October, the lowest level in three years in a win for Javier Milei’s fight against Argentina’s worst economic crisis in over two decades.

• 🇸🇬: Grab reported strong Q3 earnings with 17% YoY revenue growth and EBITDA of US$90 million (224% YoY) as the stock price surged 12%.

Donald Trump re-elected

This past Wednesday, the world collectively watched a red wave swept over the electoral college map as Donald Trump’s victory over Kamala Harris means that he will start his term as U.S.’s 47th president in January 2025.

It will be interesting to watch how his second term unfolds. There was immediate reaction in the markets with Bitcoin up ~10% and S&P up >2% as most U.S stocks rallied sharply, including Tesla (14%) and Coinbase (31%).

This rally can be attributed to (a) the dominance of Trump’s victory which removed any potential uncertainty surrounding the election results and (b) his policies which are perceived to be favourable to risk-on assets and cryptocurrency. Here’s a recap of some of the key policies he campaigned on:

1. Immigration: Trump has made the deportation of unauthorised immigrants one of his top priority.

2. Taxes: Trump’s policies generally favours corporations and wealthier Americans, including the intention to cut corporate tax rates.

3. Tariffs: In a nationalistic move, Trump has called for a 20% import tariff, a 60% duty on Chinese goods, and a punitive tax on U.S. companies that ship jobs overseas.

4. Climate and energy: The man who believes climate change is a hoax has pledged to cut back on incentives related to clean energy such as EV credits.

5. Crypto: This election cycle, Trump has been pro-cryptocurrencies, promising to build a Bitcoin reserve and replace SEC chair Gary Gensler (who is seen as unfriendly towards cryptocurrencies).

6. De-regulation: In general, Trump is a de-regulator and this is favourable for industries that have been clouded by regulatory uncertainty.

You should also keep an eye out for who Trump engages to be part of his new cabinet - Elon Musk and RFK Jr are among some of the high-profile names that have been heavily involved in his campaign. His selections will most certainly have downstream implications - Musk for example, should be expected to have vested interests in policies that favour his companies (Tesla, SpaceX etc).

As Trump’s second administration looms closer, some things seem certain to me. Lower tax rates and de-regulation will fuel greater economic activities and M&A. This, coupled with stricter immigration policies that affects labour supply, will in turn fuel inflation. And lastly, cryptocurrencies (especially Bitcoin) looks set to be a huge beneficiary especially if the U.S. is to be a net-buyer of Bitcoin.

Personally, I have re-allocated my portfolio to increase my Bitcoin exposure post-election. What moves are you making, if any?

This Week:

• 🇺🇸: Fed cuts rates by 25bp as expected, and Powell said that he has no intention to resign if asked by Trump.

• 💰: A French trader “Theo” made $85 million from his bets on Trump’s election victory on Polymarket, the site that rose to prominence this election cycle for enabling election betting via blockchain.

• 🇮🇳: Swiggy’s IPO was oversubscribed as it gears up to debut on stock exchanges next week. The loss-making firm is India’s second biggest player in a duopolistic food delivery and quick-commerce sector shared with Zomato. In contrast to other countries, India has had a buoyant IPO market this year.