Kalshi & Polymarket Eye $20B Valuations

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Good Morning,

Macro forces are tightening their grip on crypto. Bitcoin's fragile recovery stalled below $70K as ETF outflows returned, while the Hormuz blockade escalates into the largest oil supply shock in history, with Goldman warning $100+ oil is now a base case.

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In Today's Email:

• What Matters: Kalshi & Polymarket Eye $20B Valuations 👀 

• Product of the Week: Coinbase’s Unified Cross-Margin 🛠️ 

• Charts: Bitcoin ETF Outflows Return, Largest Oil Supply Shock Ever 📊 

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WHAT MATTERS

Kalshi & Polymarket Eye $20B Valuations

State of play: Both Kalshi and Polymarket are in early talks to raise funding at roughly $20B valuations, doubling their late-2025 rounds, as combined monthly trading volume has surged from under $2B to over $18B in just six months.

• Kalshi has crossed a $1B annualized revenue run rate (with some estimates near $1.5B), recording over $1B in volume on Super Bowl Sunday alone.

• Polymarket, currently restricted to US waitlisted users, plans a full regulated domestic launch this year after securing CFTC clearance in November 2025.

• New legislation introduced by two US Representatives would ban contracts on war and sports, adding regulatory pressure to the sector.

• Insider trading allegations have emerged, including six wallets that reportedly netted ~$1M betting on a US Iran strike hours before it happened.

• Competitors including DraftKings, Coinbase, Nasdaq, and Cboe have begun entering the prediction market space, though investors still view Kalshi and Polymarket as the dominant duopoly.

Why it matters: Prediction markets are being priced as financial infrastructure, not speculative tools, putting them in direct competition with established exchanges at a scale that regulators can no longer ignore.

Our take: Both platforms are racing to lock in legitimacy before legislation catches up. The more politically sensitive the contracts, the more liquid they become, and the more regulatory risk they carry.

For builders and investors: The critical unknown remains classification: exchanges or gambling operators, as that distinction defines the entire business model.

PRODUCT OF THE WEEK

Coinbase’s Unified Cross-Margin for Institutional Trading

Coinbase Prime is rolling out regulated futures and unified cross-margin functionality across spot and derivatives markets, positioning itself as a one-stop institutional platform as competition in crypto prime brokerage intensifies.

• Coinbase Financial Markets will provide 24/7 access to 20+ futures and perps contracts, regulated by the CFTC as a Futures Commission Merchant.

• Unified cross-margin allows institutions to use a single collateral pool across spot and derivatives, replacing historically siloed margin systems.

• The move improves capital efficiency for strategies like crypto basis trades, combining long spot and short futures positions under one risk framework.

• Derivatives represent roughly 70-75% of total crypto trading volume, making this a high-stakes expansion for Coinbase's institutional business.

• Coinbase competes with FalconX, Bitgo, and DCG in full-stack prime brokerage, while also expanding into equities, tokenization, and prediction markets as the "Everything Exchange."

Other cool products:

• Perpl, a perp DEX on Monad.

• BasedoneX, an on-chain finance superapp.

• Decibel Perps, an on-chain exchange on Aptos.

• SagaEVM, a layer-1 blockchain for launching custom chains.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

CHARTS OF THE WEEK

Bitcoin Slips Below $70K as ETF Outflows Return

State of play: BTC's brief rally, fueled by $1.1B in ETF inflows and $3.5B in spot buying since March 1, stalled on March 5 as net outflows returned and macro uncertainty persisted, leaving analysts divided on whether the rebound is structural or a relief rally.

• US spot Bitcoin ETFs recorded $227.9M in net outflows on March 5, snapping a three-day positive streak led by BlackRock's IBIT.

• Bitfinex noted spot buying has been "systemic," with the Coinbase premium turning positive after 40 days in negative territory.

• Some analysts flagged Bitcoin's resilience during the US-Israel-Iran conflict as evidence of a growing safe-haven narrative.

• QCP Capital warned that oil prices, not geopolitics, remain the key macro driver, with elevated energy costs keeping yields heavy and capping a sustained rally.

• Bitcoin traded around $69,925, down 4.1% in 24 hours, with a dense long-liquidation zone near $70K and potential support retest closer to $66K.

Our take: The rally has healthier foundations than previous bounces, but renewed ETF outflows and oil-driven volatility suggest the market needs a cleaner macro catalyst to confirm a trend change.

Oil Could Hit $100 as Hormuz Blockade Becomes Largest Supply Shock Ever

State of play: Goldman Sachs warned that oil could breach $100/barrel within days and reach $150 by month-end, as Iran's blockade of the Strait of Hormuz has cut flows to just 10% of normal levels, making this the largest oil supply shock in history.

• Goldman initially expected flows to drop to 15% of normal, but Iran's Revolutionary Guards threatening to "set ablaze" any transiting vessel pushed that figure to 10%.

• The current shock is 17x larger than Russia's peak production hit after the Ukraine invasion, which alone pushed oil to $110/barrel in 2022.

• Oil has already surged 50%+ this year, rising from ~$60 at the start of 2026 to above $94 on Sunday, with a $10 single-day spike in US crude on Friday alone.

• Gulf storage in Saudi Arabia, UAE, and Kuwait is nearing capacity, meaning major oilfields may need to shut down entirely if exports remain blocked.

• Qatar's energy minister warned all Gulf energy exporters could be forced to halt production within weeks if the conflict continues unabated.

Our take: With Trump demanding unconditional surrender and no relief in sight, $100+ oil is no longer a tail risk but a base case.

QUICK BITES

• First US state-level stablecoin bill passes in Florida.

• Binance terrorism lawsuit dismissed, but plaintiffs could refile.

• Donations to UK party pushing pro-crypto policies reach $16M.

• Kalshi and Polymarket exploring fundraising at $20B valuations.

• Crypto Fear and Greed Index falls back down to 'extreme fear' levels.

• Bitcoin slumps to $66,000 as oil price spike rattles Asian stock markets.

• Coinbase rolls out unified cross margin across spot, derivatives and perps.

NOTEWORTHY READS & MEME

• Gabriel Shapiro’s read on 5 Ways of Tokenizing Securities.

• Sam’s read on How Onchain Forex Volumes 100x From Here.

• Kyle Soska’s read on What Ethena is telling us about the crypto market.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.