Weekly Roundup 06/12/26 (Strategy buys the dip, Zcash Orchard bug, eurodollar stablecoins)

**SPEAKER_1** (0:01)
Matt Walsh and Nic Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and hosts may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only.

**SPEAKER_2** (0:22)
Brought down by Bad Mortgage Investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion.

**SPEAKER_4** (0:35)
The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

**Nic Carter** (0:42)
The Bank of England has pumped $75 billion more into Britain's ailing economy. The new round of quantitative easing.

**SPEAKER_1** (0:47)
You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin.

**Matt Walsh** (0:53)
Welcome to On The Brink, I'm Matt Walsh.

**Nic Carter** (0:55)
And I'm Nic Carter.

**Matt Walsh** (0:57)
And you wanted to start this one out by talking about relegation.

**Nic Carter** (1:01)
Yeah. So we don't have, it's not really a concept in American sports, right?

**Matt Walsh** (1:05)
No, I think it should be. I like the idea.

**Nic Carter** (1:07)
If you do really badly, you go down to the lower league.

**Matt Walsh** (1:12)
Yeah.

**Nic Carter** (1:12)
It could work in baseball. You were saying it could work in baseball.

**Matt Walsh** (1:16)
Oh, yeah. I mean, I think the Red Sox are a minor league franchise right now. So they should be down there.

**Nic Carter** (1:21)
So in English soccer, there is a whole pyramid. So it's like the Premier League and then the Championship, and then League One and League Two. That's the order, which doesn't make sense. The naming needs to be worked on. And if you're in the bottom three teams in the Premier League, you go down. And if you're in the same vice versa from the end, it makes a huge difference. If you get promoted from the Championship, you make something like $100 million more the next year because you get TV money.
So all this is to say in Spain, they have the same thing. So there's a La Liga club, which we think is Osasuna. They were facing potential relegation. They placed a bet against themselves on Kalshi, apparently. I think it was through an intermediary.
So they were hedging the financial hit of dropping down to the lower tier.

**Matt Walsh** (2:14)
Wow.

**Nic Carter** (2:14)
So this is an instance of something we've thought should happen, which is people starting to use prediction markets for actual hedging.

**Matt Walsh** (2:22)
Yeah.

**Nic Carter** (2:23)
Which they kind of need. They need corporate buyers to start using it as a hedge, not just have speculative usage.
Here's the kicker. They didn't get relegated.

**Matt Walsh** (2:32)
They didn't. So they just bought the insurance, basically.

**Nic Carter** (2:34)
Paid up for expensive insurance and they survived.

**Matt Walsh** (2:39)
That's an interesting use case to write. Is it like an actual economic utility for these prediction markets in a way that a lot of this is not?
I wonder if that's legal. Is there any law against that in sports?

**Nic Carter** (2:53)
Apparently they bought it through an insurance provider and the insurance provider bought basically reinsurance on Kalshi.

**Matt Walsh** (3:01)
Oh, interesting. I could definitely see that. Buying it through an insurance provider seems run of the mill.

**Nic Carter** (3:06)
Apparently it was Susquehanna that did it. So this is actually what Polymarket and Kalshi need, is corporates starting to hedge as opposed to just retail trading on things and just speculatively.

**Matt Walsh** (3:22)
It's interesting that it was Susquehanna on the other side of it. I do think you're going to see this growing market of companies like Susquehanna, these market makers and prop trading firms that go out to brokerages and directly engage them for over-the-counter prediction markets and don't actually settle it back to Kalshi and Polymarket.

**Nic Carter** (3:42)
Yeah, that would be, I guess that's a risk factor is that they go off exchange. But I agree.

**Matt Walsh** (3:48)
The OTC market is pretty big. I mean, a lot of that will hit exchanges at some point, but I think you'll see these desks just warehouse a bunch of that risk.

**Nic Carter** (3:58)