Prediction platforms Polymarket and Kalshi are preparing for promising valuations in the billions, driven by changing regulations and growing trading volumes.
Regulatory Changes
Polymarket is exploring a deal that could value the company at $9 billion just three months after raising funds to $1 billion led by Peter Thiel's Founders Fund. After being barred by the Commodity Futures Trading Commission (CFTC) from offering contracts in the U.S., Polymarket has now received approval to operate again, allowing it to relaunch legally and pursue further growth. CEO Shayne Coplan stated that this decision effectively gives them the "green light" to resume operations in the USA.
Kalshi's Expansion and Legal Scrutiny
Kalshi is nearing a $5 billion valuation following a $185 million raise in June, leading to a valuation of $2 billion. In August, Kalshi recorded $875 million in trading volume, and the recent momentum is partly explained by a 2024 court ruling allowing it to list political event contracts. However, the platform faces legal challenges in Massachusetts, where the attorney general filed a lawsuit allege that sports event contracts violate state laws on sports wagering.
Competing Models and Investor Demand
Polymarket and Kalshi operate with different business models. While Polymarket runs on the Polygon network and allows pseudonymous access, Kalshi is a federally regulated U.S. exchange that requires full KYC. Despite these differences, both platforms are showing signs of accelerating adoption, reflecting the growing interest from investors in event-based contracts as mainstream products.
The competition between Polymarket and Kalshi highlights the increasing investor attention towards prediction markets, potentially reshaping this niche amid evolving legislative landscapes.
