Author: Zhou, ChainCatcher

According to a report by the WSJ, Donald Trump Jr., the eldest son of Trump, is planning to make an additional investment of approximately $300 million in the prediction market platform Polymarket through the investment fund 1789 Capital, of which he is a partner.

This funding is part of a new $1 billion funding round led by 1789 Capital, and if the transaction goes smoothly, Polymarket's valuation is expected to reach approximately $21 billion. 1789 Capital had previously invested about $200 million in Polymarket and is expected to become one of its largest shareholders after this round is completed.

The Past and Present of 1789 Capital

1789 Capital was established in October 2022, founded by investment bankers Omeed Malik, Rebekah Mercer, and entrepreneur Chris Buskirk, with Malik serving as president.

Malik graduated from Colgate University and Emory University School of Law, previously worked as a corporate lawyer, then moved to MF Global, and later joined Bank of America Merrill Lynch to oversee commodities brokerage.

In early 2018, Malik left after being investigated due to accusations made by subordinates, subsequently filing a $100 million arbitration claim alleging defamation and discrimination against the bank. In July of the same year, Bank of America agreed to pay an undisclosed millions to resolve the matter, and neither party provided conclusive statements on the facts.

After that, Malik founded a boutique investment bank, Fawazal Partners, invested in conservative new media projects, and served as the chairman of a SPAC. According to his recollection, his political stance shifted due to dissatisfaction with the government's response to the COVID-19 pandemic, and subsequently, his investment narrative gradually turned anti-ESG and anti-DEI.

After the 2024 election, Trump Jr. joined 1789 Capital as a partner, and since then, the fund has rapidly expanded.

By early 2025, its growth equity fund had a size of about $150 million to $200 million, surpassing $1 billion by September of that year, and reaching $2 billion by the end of December, closing to new investors. By May 2026, the managed scale had risen to approximately $3.5 billion, an increase of about 17 times compared to the beginning of 2025.

The fund invests in a wide range of fields. In the AI sector, it includes Cerebras, Groq, Perplexity, Databricks, and Crusoe; in the defense sector, there are Anduril, Hadrian, and Vulcan Elements; in consumer sectors, investments include e-commerce platform GrabAGun, e-cigarette brand Juul, and PublicSquare, in the space sector covering SpaceX and Axiom Space, and it also participated in funding for Elon Musk's Neuralink, X, and xAI.

According to CNN, in the first 500 days following the start of Trump's second term, the ten defense, aerospace, and software companies funded by 1789 Capital collectively received over $1.6 billion from federal contracts and grants. A spokesperson for 1789 stated that there had been no discussions with the government regarding federal contracts for portfolio companies. Trump Jr.'s team claimed that he does not facilitate connections for the companies he invests in or advises to federal agencies.

One notable case is Vulcan Elements. In August 2025, 1789 Capital completed an investment when the company's valuation was about $200 million. Three months later, the Pentagon issued a $620 million loan to it, and the Department of Commerce added a grant of $50 million, causing the company's valuation to jump to approximately $2 billion. Senator Elizabeth Warren and others co-signed a letter alleging that this transaction involved serious conflicts of interest.

Polymarket is another name that cannot be ignored in this context. Since January 2025, Trump Jr. has served as a paid strategic advisor to Kalshi and was granted approximately $300,000 worth of company stock. In August 2025, he joined Polymarket's advisory board amid the investment from 1789 Capital.

The two companies are direct competitors, and he sits at the table of both. His spokesperson stated that this would not change his role at Kalshi. Meanwhile, the Trump Media Group once planned to embed its predictive product Truth Predict on Truth Social and had discussed providing the Truth API to Wall Street.

According to Fortune, although there is currently no public evidence showing that Donald Trump Jr. or the Trump family has traded using insider information from the government, the potential conflicts of interest arising from the intertwining of presidential public information, market trading, and family business interests are attracting outside attention.

Valuation Frenzy, Income Enigma, Polymarket's Capital Game

Polymarket's valuation jumps almost always follow a regulatory or capital event.

In 2022, the U.S. Commodity Futures Trading Commission determined that it was operating an unregistered derivatives exchange, imposing a $1.4 million fine and requiring it to block U.S. users. The platform then shifted to overseas operations, settling event contracts using on-chain stablecoins.

The 2024 U.S. election became a turning point, with political betting turning Polymarket into a global opinion market, leading to a significant increase in trading volume in the fourth quarter of that year.

In July 2025, the Department of Justice and the CFTC ended their previous investigation of the platform without pressing charges. On the 21st of the same month, Polymarket invested $112 million to acquire the licensed exchange and clearinghouse QCEX, gaining resources to return to the U.S. market. On August 26, 1789 Capital announced a strategic investment, and Trump Jr. also joined the advisory board.

In October 2025, Intercontinental Exchange, the parent company of the New York Stock Exchange, promised to invest up to $2 billion, with a pre-investment valuation of about $8 billion. On November 25, the CFTC issued a revised order allowing its U.S. entities to operate using a futures broker intermediary model. Once the regulatory door opened, traditional finance began to enter on a large scale.

In March 2026, Intercontinental Exchange invested another $600 million. The company disclosed a total holdings of approximately $1.6 billion, accounting for about 22% of the issued shares, making it the largest institutional shareholder. (Recently it indicated it may continue to increase its holdings). A financing round in April 2026 brought in institutions like D.E. Shaw and G Squared, elevating the valuation to about $15 billion. Now, 1789 Capital is leading an approximately $1 billion new round, investing around $300 million of its own, with the post-investment valuation aiming for $21 billion, making it one of the largest shareholders after this round is completed.

Behind the soaring valuation, the income figures tell a different story. Polymarket began charging traders fees in January 2026, with annualized income projections from the third-party platform Sacra being about $1 billion, while on-chain data platform DefiLlama estimated an annualized income of about $162 million, showing a discrepancy of nearly 8 times. Based on a $21 billion valuation, using the former gives a price-to-sales ratio of about 21 times, while using the latter approaches nearly 130 times.

Data from the Artemis platform shows that from October to December 2024, the prediction market was almost entirely Polymarket's market. This year the situation began to reverse, with the World Cup pushing the overall market's weekly transaction volume to around $17 billion at one point, maintaining above $10 billion per week after the events, but the incremental flow mainly shifted toward competitor Kalshi.

By August, Kalshi's non-sports transactions totaled approximately $24.9 billion, while Polymarket had only around $1.5 billion; Polymarket's share in cryptocurrency categories dropped from around 80% to about 10% within a year. However, political betting remains Polymarket's stronghold, consistently accounting for about 90% of the share.

Even having regained compliance in the U.S., Polymarket's business focus is still overseas. On-chain data shows that for the week of August 30, its fee income from international users contributed about $1.4 million, while U.S. users contributed about $610,000, with international users accounting for over 70%, which is also reflected in the trading volume structure.

More importantly, the prediction market is no longer exclusive to two companies. After the trading volume expanded, centralized exchanges and on-chain protocols are also entering the space, which means Polymarket faces pressure from both ends.

Since the beginning of the year, Coinbase has opened prediction markets to U.S. users, with orders flowing through Kalshi's compliant track, and the company claims this is among the fastest new products launched. Robinhood earlier integrated event contracts into its brokerage app, first directing traffic to Kalshi, and is preparing its licensed exchange Rothera. Crypto.com made OG, Gemini made Predictions, Interactive Brokers' ForecastTrader and Webull have also launched similar products. Traffic entrances are shifting from crypto-native websites to brokerages and exchanges that already have funding accounts.

On the other hand, the on-chain aspect is also splitting. Limitless on Base is making short-term crypto predictions at 15-minute and hourly intervals, with monthly transactions reaching around $1 billion at one point. Opinion and Predict.fun on the BNB Chain are respectively capturing macro themes and Binance wallet traffic. Myriad is integrating into media, while Azuro provides the underlying marketplace for dozens of frontends, and Hyperliquid is bringing result contracts into its own order book using HIP-4.

With capital rushing in, the market is getting increasingly crowded, making the exit issue more pressing. The exit for capital is nothing but issuing tokens and going public. Last year Polymarket executives publicly stated that there would be tokens and airdrops; the parent company Blockratize applied for the registration of the POLY and $POLY trademarks in February of this year, and ICE's collaboration announcement also mentioned future tokenization arrangements, but specific issuance timelines and airdrop rules have yet to be finalized.

Currently, the company has not submitted an IPO prospectus, and JPMorgan ended its banking partnership with Polymarket last year due to regulatory risks, but stated that it still maintains multiple business interactions with the company and is considering participating in future IPO underwriting.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。