Markets
Vitalik Buterin and Peter Thiel Back Crypto Prediction Market Polymarket with $70M Funding
Polymarketknown for allowing users to place bets on results of various eventssecured $70 million in funding in two rounds, the most recent led by billionaire investor Pedro Thielin Founders Fund.
What happened: Other notable supporters include Ethereum (CRYPTO: ETH) co-founder Vitalik Buterin.
This comes despite a proposed ban on event-based forecast contracts by the Commodity Futures Trading Commission (CFTC), the main US derivatives regulator.
The platform has seen a rise in the number of users predicting various event outcomes, with the 2024 US presidential election emerging as the most popular prediction.
Previously, Polymarket faced fines from the CFTC and agreed to cease its U.S. operations while continuing abroad.
“A big part of the reason why certain people don’t like the prediction markets in the US goes back to the rather puritanical thinking about betting,” he said. Joey Krugpartner at Founders Fund, regarding the CFTC proposal.
He added: “In the short to medium term, it is good for Polymarket because they are targeting markets outside the US. In the long term, it will be good if Americans can also participate in this market.”
Polymarket has witnessed more than $170 million wagered on U.S. election-related events, according to its website. Even the former president donald trump cited Polymarket’s odds regarding his potential return to the White House.
Thiel, known for his libertarian views and criticism of regulation, sees the growth of the cryptocurrency market as a challenge to traditional financial systems.
Read too: Inflation Data Means ‘If You’re Bullish, Buy Bitcoin, Bearish, Short Ethereum’: 10x Research
Why does this matter: This marks Founders Fund’s first investment in a platform that facilitates event betting contracts, Krug noted.
To improve its standing with regulators, Polymarket appointed the former head of the CFTC J.Christopher Giancarlo as chair of its advisory board following a regulatory settlement in 2022.
The platform, founded by a 25-year-old Shayne Coplanallows users to trade predictions on a variety of topics, including Elon Musk’s social media activity and GameStop Corp.’s stock performance.
Polymarket allows customers to buy shares using dollar-backed stablecoin (CRYPTO: USDC) without taking custody of client funds or digital tokens, and operates by displaying markets on the Ethereum blockchain.
Founders Fund led a $45 million Series B funding round, while General Catalyst had previously facilitated a $25 million Series A round.
Despite the recent funding, the company’s valuation has declined compared to previous discussions.
Previously, Polymarket was targeting a valuation of nearly $1 billion before the CFTC actions, according to for Bloomberg.
“Ultimately, we have a deep conviction that there will be markets for all the things that people wonder about and have opinions about,” Coplan said in an interview.
He acknowledged that immediate returns from the US market are unlikely, but remains optimistic about the platform’s long-term potential.
What is the next: The implications of such investments and regulatory challenges will be a key topic at Benzinga’s meeting Future of digital assets event on November 19, where industry experts will discuss the evolving landscape of digital finance and the impact of regulatory actions on innovative platforms like Polymarket.
Read next: President Biden Cracks Down on China-Backed Crypto Mining Facility Near US Missile Base
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