6 min read · 12 sources

Prediction markets are about to stop being a sports-betting curiosity and become a financial asset class. Bernstein is calling for annual volumes to hit $10 trillion by 2035, up from an estimated $410 billion this year - a roughly 70% compound annual growth rate. The driver isn’t the Super Bowl; it’s crypto, equities, and commodities overtaking sports as the dominant volume category.

The numbers are already moving that way. Crypto’s share of Kalshi’s volume jumped from under 5% in January to about 20% in August. Commodity trading grew from under $2 million in 2025 to roughly $590 million year-to-date. Kalshi now holds about 60% of industry volume, up from 35% in 2025. If Bernstein is right, the infrastructure that settles these markets becomes as important as the exchanges themselves.

Crypto’s share of Kalshi’s volume jumped from under 5% in January to about 20% in August, while commodity trading grew from under $2 million in 2025 to roughly $590 million year-to-date.

Fairshake Puts $30 Million on the Table for Ohio

Source: theblock.co ↗

Crypto’s biggest political spender is going all-in on a midterm Senate race. Fairshake is committing $30 million against former Sen. Sherrod Brown in Ohio, its most aggressive move yet, and it lands days after the Clarity Act failed its Senate procedural vote.

This is a rematch. Fairshake spent $12 million in 2024 backing Republican Bernie Moreno, who beat Brown - a former Senate Banking Committee chair who wanted to crack down on crypto’s use in terrorism financing. Crypto money has flowed since April to support Republican Sen. Jon Husted, who faces Brown in November and backed the GENIUS Act. Fairshake says more midterm spending decisions are coming, even though it also backed Democrats Ruben Gallego and Elissa Slotkin, both of whom voted against the Clarity Act. The signal is clear: the PAC punishes anti-crypto votes regardless of party.

Coinbase for Agents Gets a Securities License

Source: coinbase.com ↗

Coinbase for Agents now trades US stocks and ETFs alongside crypto and derivatives. Trades route through Coinbase Capital Markets Corp., with clearing and custody by Apex Fintech Solutions - the same backend that powers Coinbase’s retail equities business. The platform offers 24/5 trading, fractional shares from $1, and zero commissions.

The interesting part for engineers is x402, the payments protocol that lets agents make micropayments for data and model inference. It’s surpassed 230 million transactions and $54 million in cumulative volume in just over a year, with Coinbase processing more than half of all x402 transactions. A single account balance now covers both equity trades and micropayments as low as fractions of a cent, with configurable per-asset permissions and per-action approval guardrails. Tokenized equities outside the US are on the roadmap.

Trueo Leaves Base for Ethereum Mainnet

Source: theblock.co ↗

Onchain prediction market Trueo is migrating its primary deployment from Base to Ethereum mainnet, arguing Ethereum best fits its goal of being widely adopted, permissionless, and highly credible. It launched on Base in March 2025. Vitalik Buterin welcomed the move on X, calling Trueo a “strong prediction market contender” dedicated to decentralization and “not corposlop.”

There will be no service interruption during migration. The TRUE token migrates alongside the app with an indefinite migration window. Trueo says it’s prioritizing a more impartial resolution oracle - a direct response to disputes like the lawsuit over Polymarket’s contested resolution of a Strategy bitcoin-sale market. For anyone running prediction market infrastructure, the resolution oracle is the trust bottleneck, and Trueo is making it the selling point.

The Barbellification of Crypto VC

Source: threadreaderapp.com ↗

Crypto VC funding has split into two extremes, according to a thread making the rounds: companies that show fast revenue by riding a market frenzy - which ironically need the least capital - and companies that absorb large financing rounds from big funds, where the financing itself becomes a moat.

The cited examples: Pendle raised $3.7 million from Mechanism Capital in 2021 at around $20 million TVL and now generates $13 million in annualized revenue. Polymarket raised $4 million from Polychain in 2020 and took four years to find product-market fit around the 2024 US elections. The takeaway for seed investors is spotting a future category leader before its edge is obvious. Firms with only short revenue spurts and no IPO path struggle to get underwritten.

CFTC Opens Formal Probes After Onchain Forensics

Source: threadreaderapp.com ↗

Blockchain analytics firm Bubblemaps published investigations into two crypto insider trading cases using onchain data visualization, and the CFTC opened formal investigations into the same cases shortly after the stories went live. Wired obtained FOIA documents confirming the agency ordered the probes, with cases tied to Polymarket activity involving high-profile political events.

One case involves a wallet that bet $212k on “Yes” for Axiom at $0.33, winning $421k, with the trader also buying “No” shares to ward off detection. The pattern is notable: public onchain forensics preceded formal regulatory action, compressing the discovery-to-enforcement timeline. But the thread also critiques flawed on-chain analysis that falsely links wallets based on weak heuristics like single-address matches and large time gaps. The CFTC is reading the same public data you are.

Why AI Trading Agents Create Herding Risk, Not Democratized Alpha

Source: threadreaderapp.com ↗

LLM-based trading operates on second-to-minute timescales alongside HFT at microsecond scale - about 50% of US equity volume. Each layer processes different data types, so their asset valuations diverge and open cross-frequency arbitrage windows that retail traders cannot reach.

The primary risk for retail is herding: users prompting the same models cluster into identical positions, while institutions model that predictable behavior and position ahead of the crowd. Adversarial dynamics compound the problem as CFOs tune earnings language to exploit known LLM sentiment patterns. The net outcome is not democratized alpha but a new structural edge for actors who understand both algorithmic layers. If you’re building an agent that trades, assume someone is modeling your prompts.

SEC's Tokenized Equities Exemption Disqualifies Everyone

Source: threadreaderapp.com ↗

The SEC’s Exemptive Relief letter for Tokenized Securities restricts trading to permissioned AMM venues where both LPs and traders must complete KYC/KYB. That excludes CLOB-based platforms like Hyperliquid, which market makers prefer for capital efficiency. Only SEC-registered tokenized NMS stocks qualify, disqualifying every existing permissionless tokenized equity offering from Robinhood Crypto, Coinbase, Binance, Ondo, and xStocks.

Volume is capped at 0.25% of a stock’s prior-month average daily share volume. The total tokenized equity market sits at $3 billion against a $70 trillion total market, with current platforms operating below 0.001% of real equity volume. Operators must consent to open-ended SEC examinations and provide 30 days’ advance notice before going live. TSV investors also forfeit Reg NMS best-execution protections that apply on traditional exchanges. Onchain stocks in the US are effectively blocked by Regulation NMS, which is why platforms like Kraken x BackedFi and DinariGlobal are geoblocked and operate offshore.

Quick Hits

Source: theblock.co ↗

• Spot bitcoin ETFs pulled in $998.95 million on Monday, the largest daily inflow since October 6, 2025. BlackRock’s IBIT led with $381.4 million, followed by Ark & 21Shares’ ARKB at $289.1 million and Fidelity’s FBTC at $238.8 million.
• Binance bought $100 million of Circle shares at $80.84 each in a private placement, per an SEC filing, alongside a five-year commercial deal where Circle pays Binance monthly fees based on USDC held through its wallet infrastructure.
• Apple is recruiting stablecoin specialists for Apple Pay while Google posts Web3 roles in Hong Kong, a simultaneous push by two of the largest consumer tech platforms toward blockchain integration.
• Companies with $100M+ revenue are using stablecoins operationally, with Flex business customers settling daily operations on-chain rather than through traditional rails.