Circle and Polymarket announced a partnership today that will bring native USDC to the prediction market over the next few months, replacing the bridged stablecoin version traders currently use. Polymarket runs entirely on Bridged USDC (USDC.e) through Polygon right now. Native USDC comes directly from Circle’s regulated entities and can be redeemed one-to-one for US dollars. Bridged tokens need intermediary protocols to move between blockchains, creating extra steps, issues and costs. Native versions elim ...

Bitcoin Market Dynamics - The 1-year+ holding wave of Bitcoin indicates that long-term holders are distributing their coins, consistent with historical patterns observed in post-halving years [1] - Investor expectations significantly drive Bitcoin's value, making its price highly reflexive and reinforcing the four-year cycle pattern, which has historically led to price peaks in Q4 of post-halving years [3][4] - The introduction of spot Bitcoin ETFs and increased institutional investment is changing the demand structure, providing a more stable bid for Bitcoin compared to retail-driven flows [5] 2026 Market Outlook - The outlook for 2026 suggests that while it may not resemble a traditional bear market, heightened volatility and range-bound trading are expected due to structural support from institutional capital [8] - The four-year cycle expectation continues to influence market timing and sentiment, despite the evolving market conditions [8] Ethereum's Evolution - Ethereum has solidified its position as a dominant platform for decentralized finance and tokenization, but its monetary narrative as "Ultra-Sound Money" has weakened due to reduced transaction fees and inflationary supply dynamics [10][12] - The divergence between Ethereum's strength as a network and ETH's performance as an asset raises questions about its current narrative, with two emerging perspectives: "Digital Oil" and "Yield-bearing productive asset" [13][17] Layer-1 Blockchain Competition - The Layer 1 blockchain market has become increasingly competitive, with new entrants optimizing for compliance and performance, while Ethereum maintains advantages in decentralization and developer ecosystem [18][19] - The economic value of Layer 1 blockspace is trending toward its marginal cost of operation, reflecting a highly competitive environment [20][25] Privacy Coins Resurgence - Privacy coins like Zcash and Monero have seen a resurgence, driven by ongoing demand for privacy amid increasing regulatory scrutiny in the crypto space [26][30] - Zcash is positioned favorably due to its opt-in privacy model and compatibility with regulatory requirements, unlike Monero, which faces greater scrutiny [28][30] Perpetual DEX Growth - The Perp DEX sector has experienced significant growth, with weekly volumes increasing from $81 billion in 2024 to $314.7 billion in 2025, attracting institutional interest [36] - Despite rapid expansion, the capital base of Perp DEXs remains shallow, with a leverage ratio of approximately 2.0x, indicating limited risk absorption capacity [37] Prediction Markets Development - Prediction markets have transitioned from fringe experiments to significant components of financial infrastructure, with platforms like Polymarket demonstrating superior accuracy compared to traditional polling methods [48][49] - The sector is expected to mature further in 2026, with increasing institutional interest and the development of solutions to address existing structural challenges [52]

Core Insights - Polymarket is set to relaunch in the U.S. as early as November, focusing initially on sports-related markets [1][2] - The company previously ceased U.S. operations in 2022 after a settlement with the CFTC, which included a $1.4 million fine for operating an unregistered derivatives platform [2][4] - Following the settlement, Polymarket has been operating offshore while expanding its user base in various prediction markets [3] Company Developments - Polymarket acquired QCX, a firm with exchange and clearinghouse licenses from the CFTC, enabling it to operate legally in the U.S. [4] - The platform differentiates itself from competitors by utilizing blockchain infrastructure and primarily stablecoins for trading [5] - Details regarding the planned native token, which aims to connect platform growth to the crypto ecosystem, have not yet been disclosed [5]

Core Insights - Intercontinental Exchange (ICE), owner of the New York Stock Exchange, is investing up to $2 billion in Polymarket, valuing the crypto-based prediction marketplace at approximately $8 billion [2][6] - Polymarket's CEO, Shayne Coplan, views the partnership as a significant step towards integrating prediction markets into the financial mainstream [2] - The collaboration with ICE enhances Polymarket's legitimacy and may facilitate its return to the U.S. market after previous regulatory challenges [2][5] Investment and Partnership Details - ICE will distribute Polymarket's event-driven data, providing sentiment indicators relevant to market topics, and will collaborate on tokenization initiatives [3][6] - ICE's CEO, Jeffrey Sprecher, emphasized the blend of traditional finance with innovative decentralized finance through this investment [3] Market Context - Prediction markets, where users trade contracts on future event outcomes, are gaining popularity, highlighted by Polymarket's involvement in the 2024 U.S. presidential race [4] - Polymarket is reportedly preparing to re-enter the U.S. market after federal regulators concluded their investigation without charges, with plans for U.S. consumers to access contracts soon [5]

Core Insights - The paper argues that BTC settlement in prediction markets could provide superior economics for users compared to stablecoin-denominated markets [1][2] - It critiques the current trend of using stablecoins, highlighting the opportunity cost for Bitcoin holders who miss out on potential BTC appreciation [2][3] Group 1: Current Market Dynamics - Most on-chain prediction markets use stablecoins to avoid volatility, which forces Bitcoin holders to convert their assets, leading to opportunity costs [2][3] - The author suggests treating BTC as a deflationary settlement asset, similar to gold, to allow users to benefit from long-term appreciation [3] Group 2: Liquidity Bootstrapping Strategies - The paper explores three methods to bootstrap liquidity in BTC-based markets: cross-market making, DeFi redirection of trades, and automated market makers (AMMs) [3] - Each method is analyzed for its risk profiles, including exchange-rate swings and slippage, which impact users and liquidity providers [3] Group 3: Practical Applications of BTC Settlement - BTC settlement could be particularly beneficial for long-dated political events, allowing Bitcoin holders to maintain exposure while participating in prediction markets [4] - Crypto-native communities may prefer BTC settlement as it aligns with their belief in crypto as a value storage, avoiding the need to convert to stablecoins [4] - In regions with unstable fiat or regulatory issues surrounding stablecoins, BTC-settled markets could serve as a more reliable settlement asset [4] - Events with small payoff windows or during volatile periods may also benefit from BTC denomination, making it more relevant [4]

Core Insights - A new academic paper reveals that there is a consistent presence of "free money" on Polymarket, with traders capitalizing on mispriced markets [1] - The study analyzed data from April 2024 to April 2025, identifying thousands of instances of market price discrepancies [1][5] Market Inefficiencies - In certain markets, the prices of "Yes" and "No" shares did not sum to one dollar, creating risk-free profit opportunities for quick traders [2] - More subtle mispricing was observed in logically related markets, allowing savvy traders to lock in profits regardless of outcomes [3] Profit Potential - Researchers estimate that over $40 million in profits have been extracted from the system by arbitrageurs, indicating a viable business model [4] - The study identified more than 7,000 markets with measurable mispricing, highlighting the prevalence of these opportunities [5] Broader Implications - The findings raise questions about whether these inefficiencies are unique to Polymarket or indicative of prediction markets as a whole [5] - Continuous peer-to-peer trading platforms, whether on crypto or regulated venues, are subject to similar structural inefficiencies [6] Market Dynamics - In traditional finance, inefficiencies are quickly arbitraged away by algorithmic market-makers, a trend now seen in prediction markets as well [7] - Sophisticated traders, often using bots, monitor multiple markets to exploit inconsistencies, which helps realign prices after they take their profits [7]

Core Insights - Chainlink's price reached approximately $25 on September 13, marking a 15% increase over the week, driven by Polymarket's adoption of Chainlink's data feeds for price-related wagers [1] - The integration allows for secure, real-time prediction markets across numerous crypto trading pairs, reducing reliance on social voting and mitigating resolution risks [2] - Sergey Nazarov, Co-Founder of Chainlink, emphasized that the integration enhances the reliability of prediction markets by utilizing high-quality data and tamper-proof computation [3] Integration and Market Impact - The partnership enables low-latency, verifiable price reports and automated on-chain settlement, providing Polymarket with near-instantaneous resolution capabilities for deterministic outcomes like Bitcoin and Ethereum price predictions [4] - Chainlink's open interest in derivatives is reported at $1.7 billion, with a slight decrease of 0.02% intraday, while trading volumes increased by 7.3%, indicating speculative activity focused on trimming LINK futures positions [5] Technical Analysis - The daily price chart for Chainlink shows a 15.9% rally over six sessions, bouncing from a support level of $22 to peaks around $25, with a Golden Cross signal formed at $24 [6] - A decisive close above $25 could target the next resistance level near $28, while failure to maintain above $24 may lead to a retest of the $23.30 support area, with further breakdown potentially targeting $20 [7]