Continuing education in cryptoassets.

Welcome {{first_name | fellow crypto curious and trusted fiduciary}}!

52% of Gen Z investors moved money they meant to invest into sports betting in the past year. That number comes from Betterment's new survey, and it should stop every adviser cold. These clients are already here, holding positions on venues most of the industry has never logged into.

Most advisers think Kalshi and Polymarket are betting apps. Wrong layer. They are crypto platforms wearing a sportsbook interface.

Polymarket lives on Polygon, a public blockchain. Every position is a token. Every dollar of collateral on the platform is pUSD, Polymarket's ERC-20 token, backed by USDC with the backing enforced on-chain by smart contract. The protocol settles all trading activity in USDC. When someone "bets" on the Super Bowl there, they hold crypto assets in a crypto wallet, whether they know it or not.

Kalshi took the regulated road, and it leads to the same place. Kalshi is a CFTC-designated contract market, the same legal category as a futures exchange. It takes crypto deposits from US and international users, with US transfers clearing through Zero Hash, which converts the crypto to and from fiat. And in May 2026 the CFTC approved Kalshi's BTCPERP: a perpetual futures contract on the spot price of bitcoin, listed on a prediction market, with federal sign-off.

A "betting app" now lists CFTC-approved bitcoin perpetuals. The new financial system is being built in real time, and it is being built on crypto rails whether the wealth management industry participates or not.

When a client mentions Polymarket, I hear "unreported crypto wallet." You should too.

Betterment surveyed 1,000 retail investors across four generations in April. The Gen Z findings are the story:

The numbers point at something bigger than budgeting. Young men binging on sports betting tells us we have raised a generation of young men lacking self-worth and discipline. The parlay habit is filling a hole that a paycheck and a phone full of apps did not fill.

Sports betting is not a financial plan. A hot streak is not a strategy. An adviser who can meet a 24-year-old where he is, on the venues he already uses, without endorsing the habit, will earn a client for decades. That starts with seeing the accounts.

Here is what almost nobody placing these bets is tracking, and what advisers will inherit at filing time.

Winnings are ordinary income. Gambling winnings get no preferential rate. And starting with tax year 2026, the One Big Beautiful Bill Act caps the gambling loss deduction at 90% of losses. A bettor who breaks even on the year can still owe real tax. Most of them have no idea.

No two venues report the same. Kalshi contracts are CFTC-regulated derivatives. Polymarket positions are crypto tokens. Whether a given venue's gains land as gambling income, ordinary income, or capital gains is unsettled, and the paperwork matches the confusion: sportsbooks issue W-2Gs only above thresholds, regulated venues issue their own patchwork of forms, offshore crypto venues historically issued nothing. Two apps, same wager, different tax character. The gaps between them are where audits are born.

Crypto basis rules now apply per wallet. Under IRS Rev. Proc. 2024-28, since January 1, 2025, cost basis must be tracked wallet by wallet and account by account. A user with USDC on Polymarket, stablecoins parked for Kalshi deposits, and a Coinbase account feeding both now has three basis pools to reconcile. Every transfer between them is a tracking event.

Treat this as a map of the terrain, and the terrain is ugly. None of it is tax advice. Talk to a qualified tax professional about any specific situation.

Wallet count is about to explode. Every new prediction venue, sportsbook with crypto rails, and tokenized market mints more wallets per person, each with its own balances, its own basis, its own reporting gaps. The portfolio of the next five to ten years will not look like a boring 60/40. It will look like a brokerage account, a 401(k), three exchange accounts, a self-custody wallet, and positions on two prediction markets, and the client will call that "my money" and expect their adviser to see all of it.

This is bigger than prediction markets. In a recent Crowdfund Insider piece on why wealth management is stuck in the past, our CEO, Tyrone Ross put it simply: “Data is the new AUM.” The assets are already moving beyond the traditional custodial perimeter. The question is whether advisers can see them.

That aggregation problem, many wallets, many venues, one household, is the exact problem we work on every day at Turnqey. Advisers do not need to become crypto experts or betting experts. They need to see the whole picture, track basis across all of it, and have the conversation with confidence.

The clients already crossed the bridge. Time for the industry to walk over and meet them.

And this conversation is only getting bigger. Tyrone Ross will be at the Real-World Asset Summit in Brooklyn on September 1–2, discussing the barriers keeping trillions in managed wealth from entering the crypto economy.

With gratitude,

The Turnqey Team

A pebble a day moves a mountain.

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