How are prediction markets worth billions now?

Prediction market operator Kalshi raised more than $300 million in a financing round that set its valuation at $5 billion. This is a 2.5× increase from its valuation of about $2 billion three months ago.

The funding round was co-led by Sequoia Capital and Andreessen Horowitz, with participation from Paradigm, CapitalG, and Coinbase Ventures. Existing investors also contributed.

The announcement followed a disclosure from Polymarket, which received $2 billion in investment from Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, at an $8 billion pre-money valuation.

Kalshi indicated that the funds would support platform development and regulatory compliance.

Kalshi operates a prediction market platform where users trade contracts tied to future events. Each contract settles at $1 or $0, depending on the outcome.

The platform serves users in 140 countries and operates under oversight from the Commodity Futures Trading Commission (CFTC). Kalshi lists event contracts as exchange-listed derivatives.

The company reported an annualized trading volume target of $50 billion, up from roughly $300 million last year. Weekly trading volume recently surpassed $1 billion. Its markets include political events, economic indicators, corporate earnings, and public policy outcomes.

CEO Tarek Mansour said in a statement, “The growth we’ve seen in participation and volume shows that regulated event trading has matured into a legitimate financial product category.”

Polymarket’s funding round valued the company at $8 billion pre-money. It operates a similar model, enabling users to trade contracts on event outcomes.

Polymarket had been barred from serving U.S. residents since 2022 after a CFTC settlement. It paid a civil penalty and blocked access to American users.

In July 2025, Polymarket acquired a derivatives exchange and clearing house, enabling it to operate under an approved regulatory framework.

In September 2025, Polymarket CEO Shayne Coplan announced via X (formerly Twitter),

The CFTC issued a no-action letter providing temporary relief from enforcement actions while Polymarket operates under its new regulatory structure.

Kalshi operates as a Designated Contract Market approved by the CFTC. It resumed listing election-related event contracts after a court ruling that overturned a prior CFTC block.

Kalshi’s trading activity increased after regulatory approval, with user participation and weekly trading volume growing significantly.

Polymarket’s recent capital raise and CFTC clearance allow it to operate in the U.S. under a licensed exchange and clearing partner. Kalshi continues to operate under direct CFTC supervision.

Trading Growth and Platform Reach

Kalshi’s markets allow trading on a variety of event outcomes, including national elections, economic releases, corporate earnings, and public policy decisions. The platform’s growth in trading volume reflects increased user participation across multiple countries.

Polymarket’s developments include regulatory approval and infrastructure acquisitions, which enable it to offer similar event-based trading services in the U.S. Both companies now operate under federal oversight, listing contracts as regulated derivatives.

Kalshi’s weekly trading volumes have grown steadily, reaching over $1 billion, and the company continues to expand its markets and user base. Polymarket is preparing to relaunch in the U.S. market with full regulatory clearance and operational support from its acquired exchange and clearing house.