The prediction market industry has recently undergone a significant transformation, turning from a niche segment into a powerful financial arena, with players such as Kalshi and Polymarket becoming two dominant titans that collectively control over 95% of the market.These platforms are engaged in a serious struggle for dominance, which, to a certain extent, represents a fundamental clash between traditional finance and innovations based on cryptocurrencies.
Prediction markets, also known as event trading platforms, have rapidly gained popularity in the financial world over the past few years. This happened thanks to technologies, serious investments, and aggressive marketing. What was once a favorite corner of the Internet for political forecasters has evolved into a new, complex asset class that now attracts tens of billions of dollars. The platforms allow a wide range of clients from different countries to place bets on various world events (economic indicators, sports, weather, political events, etc.) and earn money from such speculations. The numbers on these platforms have quickly become valuable and are widely used in business media and even banking reports, as they allow one to get an idea of what the broad market thinks about an event, and not just thinks, but backs up its beliefs with real money bets.
How big is this market? According to Forbes, the volume of transactions in this market in 2025 amounted to $44 billion, a multiple more than a year earlier.The research company Eilers & Krejcik has published optimistic forecasts suggesting that this market could reach $1.0 trillion by the end of the decade, with sports forecasts accounting for 44% of the volume. According to Citizens Bank estimates, the annual revenue of forecasting market operators currently exceeds $3.0 billion, and by 2030 it may reach $10 billion.
The progress of the industry is undeniable, and at the center of this revolution are two competitors: Polymarket, a global platform based on the principles of cryptocurrencies, and Kalshi, a US-based exchange licensed by the CFTC.
The landscape of the forecasting market quickly formed into a clear duopoly.The two dominant platforms—Kalshi and Polymarket—now control over 95% of the market, while other players—Limitless, Opinion, Myriad, and others—are significantly inferior to the leading pair. If you look at the duopolists, you can clearly see that they developed using completely different approaches.
Polymarket was established in 2020 and has built its empire on blockchain technology and global accessibility. The platform operates on the Polygon network, settles transactions in the USDC, and does not require strict KYC verification, which allows users around the world to bid on events. This approach has contributed to rapid growth and global expansion. The dynamics of the platform’s valuation was truly extraordinary. In October 2025, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, made a strategic investment of $2.0 billion in Polymarket, valuing the company at approximately $9.0 billion. However, a few weeks later, Polymarket began negotiations on a new financing, focusing on a valuation of $15 billion. In March, the WSJ reported that the estimate could be as high as $20 billion.
On the contrary, Kalshi has followed a fairly traditional path of development in the fintech sector. Founded in 2018, the company underwent a grueling three-year regulatory process before receiving approval from the CFTC as a Designated Contract Market (DCM) in 2020. This license makes Kalshi the first federally regulated event betting exchange.
The company’s patience has paid off handsomely. Kalshi’s valuation soared from $5 billion in October to $11 billion in November 2025. In March, Kalshi completed a new round valued at $22 billion, highlighting the intensity of the fight against the competitor. The rapid growth in valuation has demonstrated investors’ continued confidence in the classic regulatory approach.
As for geographical and demographic segmentations, the two players serve quite different user groups due to different regulatory approaches. Kalshi, which has a CFTC license and mandatory KYC requirements, is focused mostly on the US market, connecting directly to the US banking system. This approach, based on compliance with legal requirements, attracts users who prefer traditional financial infrastructure.
Polymarket, on the contrary, serves a global audience even after re-entering the US market at the end of 2025 through the acquisition of the QCEX crypto exchange, which also has a CFTC license. The light KYC model has become attractive to international users and crypto enthusiasts, although at some point Polymarket attracted the attention of regulatory authorities, encountering difficulties in certain countries.
In terms of market specialization, the two platforms have also developed different strategies. Polymarket is a leader in the political and macroeconomic markets. The platform offers a variety of events dominated by the sectors of politics, economics, cryptocurrencies, and culture. Kalshi, meanwhile, is gaining momentum in sports betting, which accounts for 89% of its revenue. Although Kalshi also offers events covering economics, cryptocurrency, entertainment, and elections, it is sport that remains the driving force.
The events that players bet on can be traded on both exchanges. It is not surprising that cross-platform arbitrage strategies have already emerged as quotes sometimes allow this to be done.
Despite the rapid growth, prediction markets are also facing difficulties. Liquidity remains a weak point, and many events are insufficiently capitalized with bets. There is still lots of uncertainty in the regulation field all over the world. The risks of insider trading are very high, because the opportunity to benefit from preliminary information creates unique problems. But all these problems look solvable in the coming years.
In conclusion, I would like to say that in our data-rich world, prediction markets provide clarity, allowing you to see essential numbers immediately. Just image how much time it would take you to calculate the numbers by yourself. The Kalshi-Polymarket duopoly phenomenon is more than just a corporate competition—it raises fundamental questions about who will have power over important information about the future. Will regulated exchanges supported by traditional finance prevail, or will decentralized, global blockchain platforms dominate?
Having been born just a few years ago, the prediction industry has evolved from a provider of alternative data to the status of a large asset class. Kalshi and Polymarket have managed to turn a niche experiment into a financial revolution. The final winner in their battle remains unclear, but it can be safely argued that the victory already belongs to the concept itself: the wisdom of the crowd, evaluated in real time, for a world desperate to figure out its future.
Anton Alikov,
CEO and Founder
Arctic Ventures
https://arcticventures.vc/
Disclaimer: GeekWire newsroom and editorial staff were not involved in the creation of this content..
