🦆 Lame duck hopes

Did you miss us? Today we're talking more about lame ducks and hope for a stablecoin bill and looking at what's going on with prediction markets.

• Are you planning to watch the Satoshi doc? Let us know what you think. 📥 crypto@axios.com

Today's newsletter is 1,184 words, a 5-minute read.

Proponents of stablecoin legislation have new reason for hope that something could get done before year-end, as Rep. Maxine Waters (D-Calif.) has put a deal on the table for House financial services Chairman Patrick McHenry (R-NC), a Hill staffer tells Axios.

Why it matters: Stablecoin legislation has been thought to be the easiest starting point for updating U.S. laws to deal with some sort of cryptocurrency.

State of play: McHenry's office has not replied to a request for comment, and it's unclear whether he or House Speaker Mike Johnson (R-La.), will sign off on the proposal.

• If a deal were to get done, the most likely vehicle to move it would be the National Defense Authorization Act, which is must-pass legislation for the year-end.
• It's likely to come as a package that includes other issues like deposit insurance reform and perhaps legislation that would permit legal cannabis companies to access the banking system.

Between the lines: McHenry, billed often as one of crypto's most powerful allies, declined to seek re-election, so his time in office is coming to a close.

• Democrats, we were told, would rather do this deal now so they don't have to start over with a new Republican atop the financial services committee.

Zoom out: Stablecoin legislation has been viewed as very close for years now, and yet nothing has gotten to a floor vote.

• Prior versions strongly favored stablecoins backed by deposits of dollars and other highly liquid instruments. They also strongly discouraged algorithmic ones. That's unlikely to have changed.

We're told, however, that a lot of other details and areas of focus have moved since then.

• One point of back-and-forth has been around state banks issuing stablecoins.

The big picture: Stablecoins — cryptocurrencies that are pegged to the U.S. dollar — have arguably become the first killer app of blockchains, with $172 billion in market cap and trillions in global volume.

• Companies like PayPal and Visa are getting into the stablecoin business.

Zoom in: While the main use case has been and continues to be trading other cryptocurrencies, stablecoins are being used more and more in other ways as well.

• A survey last spring of 2,541 crypto users in Nigeria, Indonesia, Turkey, Brazil and India, by Castle Island Ventures and Brevan Howard Digital and sponsored by Visa found a significant number of people also used stablecoins as a way to access dollars, yield generation and to make transactions.

Reality check: Legislative action in the U.S. is contingent on the election and the political calculus of leadership.

• The most likely outcome is that nothing happens, but, at the least, each party's financial services leader appears to have strong motivation to cut a deal now.

Kalshi, the prediction marketplace that won (for now) its right to operate — has floated a bunch more markets, including one for U.S. president.

Why it matters: Kalshi is not a cryptocurrency project, but its competitor Polymarket is and has been one of the buzziest projects in the industry this year.

• Polymarket's officially not available here, however. Due to a 2022 settlement with federal regulators, the company takes steps to keep U.S.-based users off its platform.

Context: Prediction markets have been a favorite concept of blockchain types going way back. (One of the original decentralized apps built on Ethereum was one called Augur.)

• The theory is that when everyone with information about a future event can weigh in with money on the line, they will contribute more honest input, giving the public the best-informed projections.
• Prediction markets are what happens when nerds dream of a better world.

The latest: Nearly $1.3 million has been bet on Kalshi for who will be elected president; over $51,000 on the balance of power; and a few thousand on who will win the most expensive Senate race in the country, Ohio.

Yes, but: In terms of volume, Kalshi is way, way behind Polymarket, which has had its best month ever each month since May.

• October has already seen $396 million in volume, putting it at roughly 80% of September's total.

The intrigue: The handful of markets that have a green light in the U.S. all narrowly favor Vice President Kamala Harris to win (see also: IBKR Forecast Traders and PredictIt).

• Polymarket shows it close too, but says former President Trump will win.

Between the lines: Notably, all of these markets are basically saying it's a coin flip, so no matter what happens none of them will be "wrong," because they are expressing a probability rather than an outcome, and that probability is super fuzzy.

• Hive mind right now: ¯\_(ツ)_/¯

With bitcoin's popularity higher than ever, HBO is diving into one of the tech world's new favorite pastimes: "unveiling" the identity of Satoshi Nakamoto tonight at 9 ET.

HBO will release "Money Electric: The Bitcoin Mystery," a documentary from director Cullen Hoback.

The intrigue: The doc's official trailer promises to "dive into the origins of Bitcoin and the identity of its creator."

• Some reports claim it will identify Satoshi. (For crypto newbies, that's the name used by its anonymous creator.)
• Bettors have wagered over $18 million on Polymarket on who it will be.

The big picture: Knowing who Satoshi is could shine a light on their motivations, Brady says. We'd also learn who (if anyone) has access to their $68 billion pile of coins.

💭 Brady's thought bubble: There needs to be some kind of proof — and not circumstantial stuff.

• Ideally, someone would actually use a cryptographic key associated with Satoshi to sign a message. Signing in to BitcoinTalk would also suffice.
• Of course, either of those would require cooperation from the inventor, which is hard to imagine. But little of anything else would be convincing.

Reality check: There've been a lot of air balls before.

What we're watching: If the result is convincing and if Hoback's candidate is dead, look for price to tick up. (That means Satoshi's stash is more likely out of the market forever.)

• More likely: No impact (because it's unlikely to be convincing either way, and that's what the market expects).
• Also... Bitcoin wasn't invented by a group of people. C'mon. 🤦‍♂️

The bottom line: Satoshi was pretty good at this whole security thing, and real proof of who he or she is may never be found.

Go deeper: The Satoshi mystery: Bitcoin's anonymous creator and a $70 billion fortune

Reach CTOs, CIOs and tech leaders with Axios.

We'll help you tell your story in the right way:

• We'll distill your brand's message into its most effective form with Smart Brevity.
• No clutter, no filler — just clean, smart and effective.

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👨‍⚖️ A convicted 2018 Ponzi schemer who used tokens was sentenced to 10 years in prison. (DOJ)

😠 Crypto.com's parent company is suing the SEC in response to a Wells Notice. (Decrypt)

💰 From the "stories you probably thought were already settled" file: The court has approved FTX's bankruptcy plan, with users getting 118% of the dollar value of their assets in November 2022. (Decrypt)

🥭 The DAO behind Mango Markets declined to approve a settlement with the SEC. (Realms)

Bonus: The New Yorker has a profile of Chris Lehane, explaining how Silicon Valley got good at political PR, except when it gets to regulating cryptocurrency it devolves into the sort of hand-waving breathlessness of my grandmother talking about the 90s internet after day-bingeing CNN.

Reach CTOs, CIOs and tech leaders with Axios.

We'll help you tell your story in the right way:

• We'll distill your brand's message into its most effective form with Smart Brevity.
• No clutter, no filler — just clean, smart and effective.

Contact us to learn more.

Recommendation: I discovered The Lonely Island and Seth Myers' podcast last weekend (which revisits the dawn of SNL Digital Shorts such as "Lazy Sunday") and have already listened to the entire run of 38 episodes... so you might like it too.

🕵️‍♂️ One thing about the recent changes to this newsletter: It's made clear which folks sending me news pitches never read it. —Brady