Kalshi vs Polymarket: Analysis of Prediction Market Data, Trading Structures, and Liquidity

On May 7, 2026, the prediction market platform Kalshi announced the completion of a $1 billion Series F funding round led by Coatue Management, with its valuation rising to $22 billion, just five months after the previous funding round, doubling in value. In the same month, its competitor Polymarket, which was surpassed by Kalshi, was also advancing negotiations for approximately $400 million in funding, with a valuation of about $15 billion.

These two funding news items, separated by less than three weeks, constitute the clearest benchmark of strength in the prediction market sector to date. When capital is injected into the same sector at such a dense pace, the question is no longer “whether prediction markets will succeed,” but rather “who will be the true winner.”

Timing of Funding Opens Competitive Gap

Kalshi’s Series F funding was officially completed on May 7, with Coatue leading the round, and Sequoia Capital, Andreessen Horowitz (a16z), IVP, Paradigm, Morgan Stanley, and ARK Invest participating. The company disclosed in its funding announcement that institutional trading volume had increased by approximately 800% over the past six months.

Polymarket’s funding information is still in negotiation. According to a report by The Information on April 20, the platform is discussing a funding plan of about $400 million with investors, corresponding to a valuation of around $15 billion, and plans to bring in more strategic investors, potentially expanding total funding to $1 billion. Prior to this, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, completed a direct cash investment of about $600 million in Polymarket last month.

From the timeline, Kalshi has completed its funding cycle, while Polymarket’s funding is still ongoing. The valuation gap between the two is about $7 billion, reflecting not only differences in regulatory progress but also highlighting the market’s valuation distinctions between “regulated assets” and “decentralized assets.”

Core Metrics Cross-Analysis

Placing trading volume, fee revenue, open interest, and user scale on the same coordinate system reveals clear differences.

Monthly Trading Volume: According to data tracked by Dune Analytics, the overall trading volume of prediction markets in April 2026 reached $8.6 billion. Kalshi surpassed Polymarket’s $1.99 billion with a first-time trading volume of $5.42 billion. In nominal terms, Kalshi’s trading volume is $14.8 billion, while Polymarket’s is about $9 billion.

Fee Revenue: Although Polymarket’s trading volume lags behind Kalshi’s, its fee income in April reached $29.22 million. This indicates either a higher average contract value or a different fee structure. The coexistence of high fee rates with relatively low trading volume suggests that Polymarket’s traders may be engaging in higher-value individual trades.

Open Interest: According to Artemis data, as of May 1, the open interest in the prediction market industry was $1.11 billion, with Kalshi holding $630 million. Together, the two platforms account for about 98% of the industry’s open interest.

Cumulative Trading Volume: Polymarket’s total cumulative trading volume has exceeded $76 billion. The combined total trading volume of both platforms has surpassed $150 billion, with approximately $21.9 billion in April alone, accounting for about 85% of the industry.

Number of Trades and Users: According to disclosures from each platform, in April, Kalshi processed approximately 94.4 million trades, and Polymarket about 87.4 million, with a difference of less than 7%. In terms of user base, Polymarket maintains an advantage due to its native crypto attributes and global accessibility.

US Market Share: According to a report by Bank of America in April, Kalshi controls about 89% of the US prediction market trading volume, while Polymarket accounts for about 7%.

Overall, the core contradiction is: Kalshi leads in absolute trading volume, but Polymarket still maintains advantages in fee income and global user coverage.

Valuation and the Debate Over Leadership

Based on the above data, there are two main points of divergence among market observers.

Is the valuation gap reasonable? Supporters of Kalshi argue that a $22 billion valuation corresponds to its monopoly advantage in the US market under CFTC regulation. Lucas Swisher, co-head of growth investments at Coatue, said: “Frankly, apart from AI, it’s hard to see other sectors with such growth” (quoted from 36Kr). Julie Hoover, an analyst at Bank of America, called Kalshi one of the “fastest-growing non-AI companies in the US.”

Critics, however, point out that Polymarket’s $15 billion valuation does not fully reflect its long-term value in global liquidity and the crypto-native ecosystem. If its negotiations with the CFTC succeed, the valuation gap could narrow significantly in a short period.

Is the surge in trading volume sustainable? Kalshi’s April trading volume surpassing Polymarket’s is seen by some as a structural inflection point, but others believe prediction market trading volumes are highly event-driven. Peaks during the 2024 US elections and major sporting events are seasonal, and monthly data alone is insufficient to define long-term trends.

Regulatory and Structural Divides

Behind the trading volume gap are fundamentally different business models.

Diverging Regulatory Paths: In 2021, Kalshi received approval from the CFTC to become a designated contract market, allowing users to buy and sell contracts on the probability of specific events occurring with US dollars. If the event occurs, the contract pays out $1. This federal regulatory status is a core competitive barrier, enabling Kalshi to legally serve users in most US states.

Polymarket was fined $1.4 million by the CFTC in 2022 for allegedly offering unregistered derivatives. Since then, the platform has blocked US users from accessing its services at the protocol level. Currently, Polymarket has officially begun negotiations with the CFTC, seeking to re-enter the US market within a legal framework. By the end of 2025, Polymarket acquired QCEX to gain limited US service capabilities.

Operational Structure and Capital Flows: Kalshi uses a centralized order book, settled in USD, categorized as a “federally compliant betting-like experience.” Polymarket operates on blockchain, settled in USDC, allowing global users to participate without bank accounts, enabling instant cross-jurisdictional settlement.

Contract Categories and Economic Models: About 85% of Kalshi’s current trading volume comes from sports contracts. Polymarket’s contracts are more focused on geopolitics, elections, and crypto ecosystem events. This difference results in opposite economic features: Kalshi’s users tend to convert sports betting into prediction trading, with many small trades; Polymarket attracts crypto-native users and quant traders familiar with complex probability pricing.

Deep Restructuring of Industry Landscape

Viewing the two platforms within the broader evolution of the industry reveals a more three-dimensional pattern of change.

Institutional Capital Entry: The investors in Kalshi’s Series F include traditional financial institutions like Morgan Stanley, while ICE’s $600 million investment in Polymarket signals a long-term bet on prediction market infrastructure by exchange operators. The influx of institutional capital suggests market pricing efficiency will evolve toward specialization, bringing higher liquidity and narrower spreads.

Market Size Forecast: Bernstein analyst Gautam Chhugani predicts that by 2026, industry trading volume will reach $240 billion, a year-over-year increase of about 370%. From 2025 to 2030, the compound annual growth rate is approximately 80%, with the industry potentially reaching $1 trillion in trading volume by 2030. Since the beginning of the year, Kalshi and Polymarket’s combined $60 billion in trading volume has already exceeded the entire 2025 forecast of about $51 billion. Three core structural drivers are boosting growth: increased federal regulatory transparency, liquidity improvements from blockchain tokenization, and growing hedging demand from enterprises and insurers.

New Entrants: Robinhood’s prediction market platform, launched one year ago, has achieved annual recurring revenue of $350 million, accounting for about 30% of Kalshi’s total trading volume. Traditional betting platforms like DraftKings and Underdog have also launched their own prediction markets.

Regulatory Battles: Jurisdictional disputes between federal and state authorities are intensifying. The CFTC claims exclusive jurisdiction over event contracts, while several states consider prediction markets’ sports contracts as essentially gambling. Reports indicate multiple states have filed lawsuits, and Congress is pushing legislation. On April 2, the CFTC and Department of Justice filed federal lawsuits against Arizona, Connecticut, and Illinois. On April 6, the US Third Circuit Court of Appeals, in a 2:1 ruling, supported Kalshi, ruling that its event contracts are “swaps” under the Commodity Exchange Act, affirming the CFTC’s exclusive regulatory authority.

Conclusion

The competition between Kalshi and Polymarket is not a traditional “winner-takes-all” scenario. Two very different paths—one under federal regulation with centralized compliance, and the other crypto-native with global decentralized operations—are evolving in parallel within the same sector.

The valuation gap of $22 billion versus $15 billion, the monthly trading volume difference of $5.42 billion versus $1.99 billion, and the US market share of 89% versus 7% are a static snapshot as of early May 2026. But as Polymarket’s negotiations with the CFTC remain uncertain and regulatory battles at federal and state levels continue, the value of this snapshot lies not in providing a final answer but in clearly defining the key variables of competition: who can first achieve the optimal balance among regulatory certainty, institutional trust, and global liquidity, and thus truly shape the next phase of the market landscape.