The parent company of the New York Stock Exchange, ICE, is in talks to invest in "Prediction First Stock" Polymarket, with a valuation potentially reaching $10 billion

Traditional financial giants are turning their attention to the emerging crypto prediction market. The parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), is negotiating a significant investment in the crypto-based prediction platform Polymarket. This move could not only reshape the future of Polymarket but also marks a further recognition of this emerging field by mainstream capital.

The Wall Street Journal cited informed sources revealing that ICE is close to finalizing a deal to invest $2 billion in Polymarket, which could value Polymarket between $8 billion and $10 billion. Details are still under discussion, but an announcement could come as early as this Tuesday.

For Polymarket, this investment from a leading global exchange operator would greatly enhance its credibility and provide strong support for its return to the crucial U.S. market. Since 2022, Polymarket has been prohibited from offering services to U.S. users.

The backdrop of this potential deal is that prediction markets are gaining increasing mainstream attention, while Polymarket's relationship with U.S. regulators has improved under the more crypto-friendly Trump administration, paving the way for its return to the U.S. market.

Regulatory Thaw and the Path Back to the U.S.

The path for Polymarket's return to the U.S. market is becoming increasingly clear. Founded in 2020, the company was officially banned from offering services to U.S. users after reaching a settlement with the U.S. Commodity Futures Trading Commission (CFTC) in 2022. However, with the changing political landscape, the situation has taken a turn.

After the Trump administration took office, Polymarket's relationship with authorities improved. The company's founder and CEO Shayne Coplan shared a Bloomberg article on social media in mid-July, stating that the investigations by the U.S. Department of Justice and the CFTC into the company had concluded. Additionally, after the November elections last year, the FBI had seized Shayne Coplan's phone.

To accelerate the return process, Polymarket has taken a series of strategic measures. In August of this year, Donald Trump Jr., the son of President Trump, joined the company's advisory board, and his venture capital firm 1789 Capital also became an investor in Polymarket. Furthermore, Polymarket acquired a small exchange and clearinghouse holding a U.S. license.

Surge in Mainstream Interest in Prediction Markets

ICE's interest highlights the growing influence of prediction markets. Polymarket allows users to bet on a variety of topics ranging from politics and sports to pop culture, gaining prominence during the 2024 U.S. presidential election. The platform's prediction market on election outcomes attracted over $2 billion in trading volume and received widespread media coverage for accurately predicting Trump's victory Polymarket is not an isolated case; its competitors are also rapidly developing. For example, Kalshi reached a valuation of $2 billion in its recent funding round and set trading volume records in recent weeks through its partnership with Robinhood Markets, leveraging contracts related to the new season of the National Football League (NFL).

In addition to early supporters like billionaire Peter Thiel's venture capital firm Founders Fund, the entry of traditional financial giants like ICE indicates that prediction markets are moving from the margins into the view of mainstream investors.

ICE's Strategic Layout and Industry Controversy

ICE has a good track record in capturing emerging trends in financial market infrastructure, and its negotiations with Polymarket align with its consistent strategic style. The actions of this exchange operator, with a market capitalization of over $90 billion, are seen as a significant bet on the future potential of prediction markets.

It is noteworthy that ICE also has connections to the Trump administration. Its Chairman and CEO Jeffrey Sprecher's wife is Trump's ally Kelly Loeffler, who currently serves as the Administrator of the Small Business Administration.

However, the expansion of prediction markets is also accompanied by controversy. Kalshi and Robinhood's foray into the sports sector has sparked strong protests from the traditional gambling industry and state-level gambling regulators. They argue that sports betting is traditionally regulated by the states, and prediction markets should not be involved. ICE's entry will undoubtedly place it at the center of this debate regarding financial innovation and the boundaries of traditional regulation