- Kalshi raised $1 billion at a $40 billion valuation. The round, co-led by Sequoia Capital and Wellington Management, follows a May raise at $22 billion and a $5 billion valuation in October 2025, an eightfold jump in about a year (Lumida calculation).
- Kalshi wants to be more than a prediction market. It plans to use the money to build leveraged event contracts, perpetual futures on individual stocks and markets on the price of compute, after launching crypto-style perpetual futures in the US in late May, and to grow an institutional business that it said accounted for 25% of volume excluding market makers in September.
- Polymarket is pushing into ultra-short crypto bets. Its CFTC-regulated US platform, operated by QCX LLC, introduced five-minute up-or-down contracts on bitcoin, ether, solana and XRP on Oct. 28, paying $1 per share for a correct call and nothing otherwise.
- Scrutiny is rising. Reuters reported that the CFTC is investigating Polymarket’s compliance with a 2022 settlement, and a June research paper on Polymarket’s earlier five-minute bitcoin contracts flagged 821 wallets tied to suspected manipulated settlements and $8.2 million in related profits, with retail traders bearing an estimated 93% of losses.
What Happened?
Kalshi announced the round Thursday, saying growth was driven by the 2026 World Cup, the NFL season and election trading ahead of the US midterms. CEO Tarek Mansour told CNBC in June that a public listing could be considered but would not come until 2027. Polymarket’s US contracts settle on the average of 60 CF Benchmarks index observations in the final 60 seconds, and the research findings predate its August 2026 move to time-weighted average price settlement and do not apply to the new US products. CNBC discloses that it has a commercial relationship with Kalshi that includes a minority investment.
Why It Matters?
Prediction markets are rapidly becoming a mainstream trading venue, and the valuations show investors betting they can grow into full-scale derivatives exchanges. Crypto is a core product: CoinDesk cited research showing Kalshi recorded more than $1 billion in crypto event-contract trading in March 2026, and Nasdaq and Cboe have considered similar products. Quantum Economics CEO Mati Greenspan warned that a simple up-or-down button “tells you nothing about the sophistication of your competition.”
What’s Next?
The legal fight over sports contracts is likely headed to the Supreme Court after two appeals courts sided with state regulators and a third backed federal oversight. Investors will also watch the outcome of the CFTC’s Polymarket inquiry and whether regulators approve Kalshi’s push into leveraged and single-stock products.
