Options-implied probabilities vs crypto digitals
"Will BTC be above $K on date X" is a digital option, and the options market prices those with billions in open interest. Compare the two venues and trade the gap. There is no gap.
The hypothesisDeribit's options market is deeper, older, and more professional than any prediction market. Compute the options-implied probability of each "crypto above $K on date" digital from the live volatility surface; where the prediction market's price diverges, the deeper market is right and the gap is a trade.
The test
Every four hours, for the full universe of crypto threshold markets: pull the live options chain, compute the risk-neutral probability of finishing above each strike from the implied vol at that tenor, and compare against the prediction market's executable prices. Pure arithmetic — no models to tune, no LLM, effectively free to run.
The result
The venues agree. Divergences live inside the band that spreads and fees on both legs would consume, and they don't persist across cycles. Whoever quotes crypto digitals on the prediction market is either literally hedging on the options venue or watching it closely enough that the distinction doesn't matter for us.
Conclusion
A satisfying null: it certifies that at least one corner of these markets is priced by professionals against the deepest available reference — which calibrates how much "dumb money" to expect elsewhere. The monitor stays on as a canary; if a real dislocation between the venues ever appears, it will more likely signal broken plumbing (an oracle issue, a settlement definition mismatch) than free money, and knowing that before trading it is the entire value of having measured the baseline.