Trump's eldest son's fund adds $300 million; Polymarket's capital game.

Author: Zhou, ChainCatcher

According to the WSJ, 1789 Capital, an investment fund with Donald Trump Jr. as a partner, plans to invest approximately $300 million more in the prediction market platform Polymarket.

This funding is part of a new $1 billion funding round led by 1789 Capital. If the transaction closes smoothly, Polymarket's valuation is expected to reach approximately $21 billion. 1789 Capital has previously invested approximately $200 million in Polymarket, and this round is expected to make it one of its largest shareholders.

The Past and Present of 1789 Capital 1789 Capital was founded in October 2022. The founding team consists of investment bankers Omeed Malik and Rebekah Mercer, and entrepreneur Chris Buskirk, with Malik serving as president. Malik graduated from Colgate University and Emory University School of Law. He worked as a corporate lawyer before joining MF Global and then Bank of America Merrill Lynch, where he was responsible for prime brokerage business. In early 2018, Malik resigned after being investigated following allegations from subordinates. He subsequently filed for $100 million in arbitration, accusing the bank of defamation and discrimination. In July of that year, Bank of America agreed to pay an undisclosed sum of several million dollars to settle the matter, and neither party gave a final conclusion regarding the facts. Afterwards, Malik founded the boutique investment bank Favajal Partners, investing in conservative new media projects and also serving as chairman of a SPAC. According to his own recollection, his shift in political stance began with dissatisfaction with the government's handling of the COVID-19 pandemic, after which his investment narrative gradually shifted towards anti-ESG and anti-DEI. Following the 2024 election, Trump Jr. joined 1789 Capital as a partner, after which the fund's size rapidly expanded. In early 2025, its growth equity fund was approximately $150 million to $200 million; by September of that year, it had surpassed $1 billion, and by the end of December, it had reached $2 billion and closed to new investors. By May 2026, its assets under management had grown to approximately $3.5 billion, a roughly 17-fold increase from the beginning of 2025. The fund has a broad investment portfolio. In the artificial intelligence sector, it includes Cerebras, Groq, Perplexity, Databricks, and Crusoe; in the defense sector, it includes Anduril, Hadrian, and Vulcan Elements; in the consumer sector, it includes e-commerce platform GrabAGun, e-cigarette brand Juul, and PublicSquare; and in the space sector, it covers SpaceX and Axiom Space. It has also participated in the financing of Musk's Neuralink, X, and xAI. According to CNN, in the first 500 days of Trump's second term, the ten defense, aerospace, and software companies invested in by 1789 Capital received more than $1.6 billion from federal contracts and grants. 1789 Capital responded that it had never discussed federal contracts with the government regarding the portfolio companies. Trump Jr.'s side stated that he does not connect companies he invests in or advises with federal agencies. The most high-profile case is Vulcan Elements. In August 2025, 1789 Capital invested in the company at a valuation of approximately $200 million. Three months later, the Pentagon provided a $620 million loan, and the Commerce Department added another $50 million in funding, causing the company's valuation to jump to approximately $2 billion. Senator Elizabeth Warren and others co-signed a letter alleging serious transfer of benefits in the deal. Polymarket is another name that cannot be ignored by this organization. Trump Jr. has served as a paid strategic advisor to Kalshi since January 2025 and has been granted approximately $300,000 worth of company stock. In August 2025, he joined Polymarket's advisory board, leveraging 1789 Capital's investment in the company. The two companies are direct competitors, and he sat at both tables. His spokesperson responded that this would not change his role at Kalshi. Meanwhile, Trump Media Group had planned to embed its own prediction product, Truth Predict, into Truth Social and discussed offering a Truth API to Wall Street. According to Fortune, although there is currently no public evidence that Donald Trump Jr. or the Trump family used government insider information for trading, the potential conflict of interest arising from the intertwining of presidential information, market transactions, and family business interests is drawing attention. Soaring Valuation, Mysterious Revenue: Polymarket's Capital Game

Polymarket's valuation leaps almost always occurred after 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 subsequently shifted its operations overseas, settling event contracts with on-chain stablecoins.

The 2024 U.S. presidential election became a turning point; political maneuvering transformed Polymarket into a global opinion marketplace, with a significant increase in trading volume in the fourth quarter of that year.

The 2024 U.S. presidential election became a turning point, with political maneuvering transforming Polymarket into a global opinion marketplace, resulting in a significant increase in trading volume in the fourth quarter of that year.

In July 2025, the Department of Justice and the CFTC concluded their investigation of the platform and decided not to prosecute. On July 21, Polymarket invested $112 million to acquire the licensed exchange and clearinghouse QCEX, securing a shell company to re-enter the US market. On August 26, 1789 Capital announced a strategic investment, with Trump Jr. joining the advisory board. In October 2025, the NYSE's parent company, Intercontinental Exchange, pledged up to $2 billion, valuing the company at approximately $8 billion pre-investment. On November 25, the CFTC issued an amended designation order allowing its US entities to operate in the US as futures brokerage intermediaries. With the regulatory door opened, traditional financial institutions began to enter the market on a large scale. In March 2026, Intercontinental Exchange (ICE) invested another $600 million. The company disclosed a cumulative holding of approximately $1.6 billion, representing about 22% of its issued shares, making it the largest institutional shareholder (it recently indicated it may continue to increase its holdings). In April 2026, a funding round introduced institutions such as D.E. Shaw and G Squared, valuing the company at approximately $15 billion. Now, 1789 Capital is leading a new round of approximately $1 billion, contributing approximately $300 million of its own capital, with a post-investment valuation expected to reach $21 billion. Upon completion of this round, 1789 Capital will also become one of the largest shareholders. Behind the skyrocketing valuations, the revenue figures don't tell a consistent story. Polymarket began charging traders fees in January 2026. Third-party platform Sacra estimates annualized revenue at approximately $1 billion, while on-chain data platform DefiLlama estimates it at approximately $162 million—a difference of nearly eight times. Based on a $21 billion valuation, the former's price-to-sales ratio is approximately 21, while the latter's is close to 130. According to data platform Artemis, from October to December 2024, the prediction market was almost entirely Polymarket's market. This year, the situation reversed. The World Cup pushed the market's weekly turnover to approximately $17 billion at one point, and it has remained above $10 billion per week since then, but the increase has mainly flowed to competitor Kalshi. By August, Kalshi's non-sports trading volume was approximately $24.9 billion, while Polymarket's was only about $1.5 billion; Polymarket's share of the crypto category has fallen from about 80% to about 10% in a year. Political trading remains Polymarket's stronghold, consistently accounting for around 90% of the market share. Even after regaining its US compliance license, Polymarket's business focus remains overseas. On-chain data shows that in the week ending August 30th, international users contributed approximately $1.4 million in transaction fees, while US users contributed approximately $610,000, with international users accounting for over 70%. The transaction volume structure is roughly similar. More importantly, the prediction market is no longer solely the domain of these two companies. With the surge in trading volume, centralized exchanges and on-chain protocols are all vying for a piece of the pie, putting Polymarket under pressure from both ends. Coinbase opened its prediction trading platform to US users at the beginning of the year, with orders following the compliant path of Kalshi; the company claims this is one of its fastest-launching new products. Robinhood had already embedded event contracts into its brokerage app, first directing traffic to Kalshi before preparing its own licensed exchange, Rothera. Crypto.com created OG, Gemini created Predictions, and Interactive Brokers' ForecastTrader and Webull have also launched similar products. Traffic is shifting from native crypto websites to brokerages and exchanges that already have funding accounts. The other side of the blockchain is also splitting up. Limitless on Base offers 15-minute and hourly short-term crypto trading platforms, with monthly trading volume once reaching billions of dollars. On the BNB Chain, Opinion and Predict.fun respectively capture macro themes and Binance Wallet traffic. Myriad is moving towards media embedding, Azuro provides the underlying platform for dozens of front-ends, and Hyperliquid uses HIP-4 to integrate result contracts into its order book. Capital is rushing in, making the market increasingly crowded, which ironically makes the exit issue more urgent. For capital, the exit options are simply issuing tokens and going public. Last year, Polymarket executives publicly stated that there would be tokens and airdrops; its parent company, Blockratize, applied to register the trademarks POLY and $POLY in February of this year, and ICE's cooperation announcement also mentioned future tokenization arrangements, but the specific issuance time and airdrop rules have not yet been finalized. The company has not yet submitted its IPO prospectus. JPMorgan Chase ended its banking partnership with Polymarket last year due to regulatory risks, but the bank stated that it still maintains multiple business relationships with the company and is considering participating in its future IPO underwriting.