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Prediction markets are not a niche crypto subculture anymore. They are mainstream finance.\u00a0<\/p>\n
Kalshi, one of the world\u2019s largest prediction markets that accepts bitcoin deposits, announced<\/a> it has raised $300 million in new funding at a $5 billion valuation and will soon open access to users in more than 140 countries, according to The New York Times.\u00a0<\/em><\/p>\n The round, led by Sequoia Capital and Andreessen Horowitz with participation from CapitalG, Coinbase Ventures, Paradigm, and others, more than doubled Kalshi\u2019s valuation from its previous raise in June.\u00a0<\/p>\n The company\u2019s annualized trading volume has surged from $300 million last year to an expected $50 billion.<\/p>\n Kalshi\u2019s ascent comes during a boom in online prediction markets, where people can trade contracts tied to the outcomes of real-world events<\/a>. These events could be elections, sports events, inflation rates, or even the weather.\u00a0<\/p>\n These markets allow traders to express views on future events and profit if their predictions are correct, functioning like a fusion of betting and derivatives trading.<\/p>\n The timing of Kalshi\u2019s announcement highlights the growing competition in the sector. Earlier this week, rival platform Polymarket revealed<\/a> that the parent company of the New York Stock Exchange plans to invest up to $2 billion.<\/p>\n As of the week of September 29, Kalshi had<\/a> over $956 million in trading volume on its platform, nearly double the volume of Polymarket, according<\/a> to data provider Dune.<\/p>\n Kalshi\u2019s recent growth has been fueled by sports markets, particularly after it introduced parlays \u2014 multi-leg bets common in traditional sports wagering.\u00a0<\/p>\n That move has rattled<\/a> established sportsbooks like DraftKings and FanDuel, whose shares have dropped sharply in recent weeks.\u00a0<\/p>\n Kalshi has also expanded distribution through integrations with brokerages including Robinhood and Webull, allowing users to trade prediction contracts as easily as buying stocks.<\/p>\n Despite its expansion, Kalshi faces growing regulatory scrutiny. While it operates under oversight from the U.S. Commodity Futures Trading Commission (CFTC), several state regulators have challenged<\/a> its sports-related contracts, arguing they effectively circumvent state-level gambling restrictions.\u00a0<\/p>\n \u201cEvery time there\u2019s a new type of financial innovation, there\u2019s always a series of questions around regulation,\u201d co-founder and CEO Tarek Mansour said per NYT<\/em> \u201cIf there weren\u2019t, what you\u2019re doing is probably not meaningful or innovative enough.\u201d<\/p>\n Kalshi\u2019s regulatory compliance remains a strategic advantage, particularly as Polymarket moves to regain U.S. access through its recent acquisition<\/a> of a CFTC-licensed exchange. Still, Kalshi is looking beyond regulation as a differentiator.\u00a0<\/p>\n Kalshi accepts bitcoin and other crypto deposits through a partnership with ZeroHash.<\/p>\n<\/p><\/div>\nPrediction markets are booming in volume<\/h2>\n
Kalshi\u2019s regulatory hurdles<\/h2>\n