Predict the Sneakers

We talked yesterday about a partnership between Kalshi Inc., the prediction market, and StockX, the sneaker market, to offer prediction markets on sneakers and other collectibles. Now you can go on StockX and buy ASICS Gel-1130 “Black Pure Silver” sneakers for $125, or you can go on Kalshi and pay 80 cents for a contract that pays $1 if the average price of ASICS Gel-1130 “Black Pure Silver” sneakers on StockX this month is above $120, or $0 if it is below that price.1

If you buy the sneakers on StockX, you get the sneakers. If you buy the contract on Kalshi, you don’t get the sneakers, but you get a pure financial bet: If the price of the sneakers averages more than $120 this month, you get a 25% return on your money. If you want the sneakers, buy the sneakers. If you have differentiated skill at predicting sneaker prices, buy the … well, I mean, if you have a lot of sneaker price prediction skill, and you think the sneakers will go up to $175, you could buy the sneakers now for $125, sell them later for $175, and make a 40% return on your money. But that requires $125 of capital and also, like, shipping the sneakers back and forth; buying the Kalshi contract is a simpler and cleaner bet. It isolates your price-predicting skill in a pure abstract financial trade; you don’t have to mess around with the sneakers.