When President Trump signed an executive order Thursday night establishing a U.S. Strategic Bitcoin Reserve, traders who had bet ‘Yes’ to the question on Kalshi, a federally regulated prediction market platform, thought they had it in the bag. But that quickly changed as the odds of a Bitcoin reserve plunged from 81% to 53%, blindsiding bettors who hadn’t read the fine print.
🚨🚨 Trump Signs Executive Order Keeping Campaign Promise to Establish a Strategic Bitcoin Reserve & Digital Assets Stockpile, Consisting Firstly of the US Government's Already Seized 198k BTC 🔥 pic.twitter.com/xYNm1kQtuh
— matthew sigel, recovering CFA (@matthew_sigel) March 7, 2025
Kalshi’s full rules require that the Bitcoin be bought by the U.S. government itself rather than merely a product of confiscation related to “criminal or civil enforcement proceedings.”
“For example, if the U.S. government established a program or body that is equivalent to the Strategic Petroleum Reserve for Bitcoin, or the United States Bullion Depository for Bitcoin, or if Bitcoin was held in the reserves of the U.S. Department of the Treasury like its foreign exchange and SDR holdings, then the Payout Criterion would be fulfilled,” the full rules state. “This would not include merely Bitcoin confiscated pursuant to criminal or civil enforcement proceedings.”
However, if the federal government holds its own Bitcoin, traders who bet ‘Yes’ can still come out on top. On Friday afternoon, the odds of a Strategic Bitcoin Reserve were 61%.
"this is a bitcoin reserve of our reserved bitcoin" pic.twitter.com/v80F1XRm96
— sartoshi (@sartoshi_rip) March 7, 2025
Settlement terms set prediction markets apart
A prediction market’s settlement terms protect the market and consumers from uncertainty about when an event has occurred. However, they also change what prediction markets on different platforms measure.
Kalshi and Polymarket offer markets on whether Trump will reclaim the Panama Canal. Kalshi gives Trump the whole term to accomplish it, and Polymarket gives him until 2026. Consequently, the odds in both markets are different. Settlement terms and sources used to verify events can vary from as much as obvious timeline differences to finer details like which newspaper or dataset will settle the market.
Prediction markets measure the conditions of an event as much as the event itself. Some events are binary, like election outcomes. But others like the Strategic Bitcoin Reserve price in constraints set by the market’s rules, not just the most general version of an event.
