Cryptocurrency News: Trump Jr. Exits Kalshi Over Polymarket
The latest cryptocurrency news from New York carries a split at the top of the prediction-market industry. Donald Trump Jr. has left his advisory role at Kalshi, the prediction market platform, after his investment firm, 1789 Capital, increased its investment in rival Polymarket. Kalshi announced on Thursday, November 12, that the two sides had mutually agreed to end the arrangement, which began in January 2025, shortly before his father’s second inauguration. The departure ends a dual role that had drawn months of scrutiny, with the president’s eldest son advising two of the industry’s largest competing platforms at the same time.
The split was first reported by Bloomberg and confirmed by Kalshi, which described the decision as a mutual commercial choice rather than a falling-out. In a statement, a Kalshi spokesperson said the two sides had mutually agreed to end Don’s advisory role after his firm’s significant investment in a competitor this past summer, and thanked him for his contributions in helping to market Kalshi to more customers. The company said discussions about parting ways began in August, when the scale of 1789 Capital’s new commitment to Polymarket became clear. Neither side disclosed the terms of the departure.
Crypto News: How the Split Unfolded
The relationship between Trump Jr. and Kalshi began on January 13, 2025, when the company named him a strategic adviser. The appointment came days before President Donald Trump was sworn in for his second term, and Kalshi said at the time that his experience and connections would support marketing, partnerships and adoption of prediction markets. Trump Jr. never invested his own money in Kalshi, but he received an equity stake in the company as compensation for the advisory position, reported by the Financial Times to have been worth about 300,000 dollars when it was granted. The stake has since been heavily diluted, according to the Financial Times, and Kalshi has not said what will happen to it now that the role has ended.
Seven months after joining Kalshi, Trump Jr. added a second prediction-market role. In August 2025 he joined the advisory board of Polymarket, after 1789 Capital, the venture firm where he is a partner, made its first investment in the company. That earlier commitment was reported at about 200 million dollars. The two roles sat side by side for more than a year, with Trump Jr. advising the two biggest rivals in the same fast-growing market. Kalshi’s chief executive, Tarek Mansour, had previously described the connection as an optics issue, according to CNBC, but the company kept Trump Jr. in place.
The arrangement held until this summer, when 1789 Capital deepened its bet on Polymarket. The firm led Polymarket’s latest funding round, contributing about 300 million dollars to a round targeting 1 billion dollars, at a reported valuation of about 21 billion dollars. The discussions about ending the Kalshi role began in August, around the time of that investment. Kalshi reportedly considered keeping Trump Jr. on, but the most recent investment changed the decision. His advisory contract ended on Thursday, about one week after the 2026 midterm elections, and he remains an adviser to Polymarket, where his firm’s exposure is now far larger.
The Two Prediction Market Giants
Prediction markets are platforms where users trade contracts tied to the outcome of future events, from elections and economic data to sports results and cultural moments. Prices on the platforms move with the collective judgment of traders, and the markets have grown from a niche product into a mainstream financial instrument. Kalshi and Polymarket are the two dominant operators, and their rivalry has defined the industry’s rapid expansion. Kalshi is valued at more than 40 billion dollars after its latest funding round of 1 billion dollars in late October, while Polymarket’s valuation of 21 billion dollars from the summer is expected to rise as more investments arrive.
Kalshi’s growth has been closely tied to politics. The company began offering political markets in time for the 2024 presidential election, thanks to a court order, and has flourished since, behind an administration that has backed the growth of prediction markets. The scale of that growth was on display during the midterm elections on November 3, when Kalshi produced more than 2.5 billion dollars in notional volume, up from 1.3 billion dollars two years earlier. Polymarket, meanwhile, has built its own vast audience, and the two platforms now compete directly for traders, listings and attention in a market that barely existed at this scale a few years ago.
The valuations tell the story of an industry that has moved from the margins to the centre of American finance. Kalshi’s reported 40 billion dollar valuation represents at least a twentyfold increase on its value when Trump Jr. joined, and Polymarket’s 21 billion dollar figure puts it among the most valuable private financial technology companies in the country. Both companies are still privately held, and their reported valuations come from funding rounds rather than public markets. Even so, the numbers explain why the biggest venture firms in the country, including 1789 Capital, are competing to own a piece of them.
Business News: The Conflict of Interest Question
The central question in the split is the conflict of interest created by advising two direct competitors at once. Trump Jr. was a paid strategic adviser to Kalshi while also sitting on Polymarket’s advisory board, and his firm was investing heavily in Polymarket at the same time. For a company that trades on trust, having a prominent adviser with a financial interest in its biggest rival was always an awkward arrangement. The optics issue that Mansour identified became harder to ignore as 1789 Capital’s commitment to Polymarket grew from an initial investment into a leading role in a billion-dollar round.
Kalshi has been careful to frame the departure as a business decision rather than a political one. A company spokesperson directly disputed the idea that political considerations played a role, saying they had no part in the separation and were not discussed. The company also stressed that the decision was mutual, and thanked Trump Jr. for his work in marketing the platform. That framing matters, because the alternative explanation, that the split was driven by the change of power in Washington, would carry very different implications for a company whose fortunes have been tied to the administration.
The departure also leaves open questions about what Trump Jr. keeps from the Kalshi relationship. Neither the terms of his exit nor whether he kept, sold or forfeited his Kalshi shares were disclosed, and the company declined to comment on the stake. The Financial Times reported that his equity had been heavily diluted by later funding rounds, which would reduce its value considerably from the 300,000 dollars it was worth when granted. What is clear is that his financial interest now sits firmly on the Polymarket side, through both his advisory role and his firm’s investment, and the dual loyalty that defined his position in the industry is over.
Democrats, Midterms and the Coming Scrutiny
The timing of the split is impossible to ignore. Trump Jr.’s Kalshi contract expired about one week after the 2026 midterm elections on November 3, in which Democrats seized control of Congress. That change of power is expected to bring new scrutiny to the Trump family’s business interests, including its growing involvement in cryptocurrency and prediction markets. Democrats are preparing to investigate the family’s financial ties to the industry, according to reports, and the prediction-market sector is likely to be among the first areas they examine.
The scrutiny will not be limited to the Trump family. Democrats are reportedly planning to crack down on insider trading in prediction markets, where traders with non-public information could profit from event contracts. Nearly 20 American states are already involved in litigation with prediction market operators over sports event contracts, a dispute that is expected eventually to be resolved by the Supreme Court. The regulatory landscape for the industry is therefore unsettled, and the change of control in Congress adds a new layer of political risk for both Kalshi and Polymarket.
For the wider economy news cycle, the political turn matters because prediction markets have become a significant part of the financial system. The platforms now handle billions of dollars in volume around elections, and their prices are quoted as indicators of public sentiment. A congressional investigation, or a Supreme Court ruling on sports contracts, could reshape the rules under which the whole industry operates. The departure of the president’s son from one of the two leading platforms does not settle any of those questions, but it removes one of the most visible links between the industry and the White House at exactly the moment the political winds have shifted.
Wall Street: Valuations and What Comes Next
On Wall Street, the split is being read as a straightforward business story. Two companies valued in the tens of billions of dollars could not share the same high-profile adviser once his firm had placed a 300 million dollar bet on one of them. The valuations themselves underline the stakes: Kalshi at more than 40 billion dollars, Polymarket at 21 billion dollars and rising, with 1789 Capital’s latest commitment still to be confirmed in full. Unlike the stock market, where prices are set in public trading, these valuations are set in private funding rounds, and they reflect the venture industry’s belief that prediction markets will keep growing.
What comes next will be decided on several fronts. The first is whether Democrats in Congress follow through on their plans to investigate the Trump family’s crypto and prediction-market ties, and whether those investigations touch Kalshi, Polymarket or 1789 Capital directly. The second is the courts: the litigation between nearly 20 states and the prediction market operators over sports event contracts will work its way toward the Supreme Court, and the outcome could define what the platforms are allowed to offer. The third is the market itself, where Polymarket’s valuation is expected to increase with more investments and Kalshi must decide whether to name a replacement for its most famous adviser.
For now, the immediate consequence is narrower. Kalshi no longer has Trump Jr. in its named strategic-adviser position, while his firm’s reported exposure to Polymarket remains and grows. The companies have not published the advisory compensation schedule, the value of any vested Kalshi interest, or details of any information barriers that may have been used while he held roles in both businesses. The split closes a chapter in which the president’s eldest son sat at the centre of the prediction-market industry, advising both of its giants. Whether the industry’s next chapter is written by regulators, by the courts or by the markets themselves is the question that will define the year ahead.
Source: Reuters