On Tuesday, the Senate confirmed Howard Lutnick as Secretary of Commerce in a 51-45 vote. Four senators – two Republicans and two Democrats – abstained. Political prediction market platform PredictIt forecasted 52 to 53 senators would confirm Lutnick. The market settled at 51 or fewer on Tuesday afternoon.
The probability of Lutnick’s confirmation by 52 to 53 senators was 50% on Feb. 12. That day, the Senate voted 52-45 to advance Lutnick’s nomination and set a confirmation date. The odds of a 52 to 53-vote confirmation rose to 86% the next day and hit 94% by Tuesday. Prediction markets have often taken advancement and cloture votes as signals of how senators will ultimately vote to confirm.
Lutnick supports Trump’s tariffs, lower corporate taxes, and greater domestic energy production, all of which align with Trump’s agenda. But he also supports crypto regulation that stands to benefit the crypto industry directly and prediction markets as a consequence.
Lutnick and prediction markets
Through his financial services firm, Cantor Fitzgerald, Lutnick has a $600 million convertible bond that entitles him to a stake in Tether. Tether owns a stablecoin, USDT, tied to the U.S. dollar. Convertible debts act as both debt and equity, giving Lutnick the obligation to purchase stock at certain times – and, therefore, a stake in a major asset he would be in charge of regulating. He has pledged to divest himself of these types of conflicts within 90 days of his appointment – May 19.
Before his confirmation, Trump tapped Lutnick for an advisory commission in charge of creating a regulatory framework for crypto assets. Certain crypto products face uncertainty about whether they’re commodities or securities, which means some crypto products don’t know which financial agency will regulate their products. Lutnick would be in charge of answering these questions as a member of Trump’s advisory commission.
As Commerce Secretary, Lutnick could support the founding of crypto startups and encourage investment in the crypto industry. Some of these crypto companies could launch new prediction markets, several of which are built on the Solana blockchain.
However Lutnick approaches the crypto industry, prediction markets are sure to benefit.
