Polymarket and Kalshi Dominate Prediction Markets After Two Years of Explosive Growth

Forget crystal balls—Polymarket and Kalshi are rewriting the rules of forecasting. Over the past two years, these platforms have surged, turning speculation into a legitimate market force and leaving traditional pundits in the dust.

The New Oracles

They bypass stuffy analysts and tap the crowd's collective intelligence. Want to bet on election outcomes, climate milestones, or tech breakthroughs? These markets have you covered—no finance degree required, just a willingness to put your money where your prediction is.

Liquidity Over Legacy

The explosive growth isn't just about volume—it's about a fundamental shift. These platforms create liquid markets for questions that Wall Street won't touch, proving that sometimes the best risk assessment comes from a decentralized mob rather than a panel of overpaid experts.

The Verdict

Two years in, the message is clear: prediction markets aren't a niche experiment anymore. They're a rapidly maturing arena where information gets priced in real-time, democracy meets data, and frankly, they often outsmart the suits in corner offices. Just remember—in markets this efficient, being wrong gets expensive fast.

Polymarket, Kalshi build up market with category-based predictions

Looking at Dune prediction market 2025 analysis, the sports category made up 39% of Polymarket’s volume, politics 34%, and crypto 18%, collectively taking 90% of total notional volume. Kalshi, on the other hand, was sports-dominated, a category that accounted for about 85% of its volume. 

Economics volume surged by ten times on Polymarket and 905% on Kalshi, while tech & science grew 1,700% on Polymarket. Open interest on both platforms stemmed from economics’ 700% and social & culture’s 600% uptrend.

Dune Analytics explained how the resurgence of prediction markets came from the University of Iowa in 1988. Economists launched the Iowa Electronic Markets, a real-money platform that could forecast political events. 

Over several US presidential election cycles, the IEM consistently outperformed traditional polling, correctly predicting outcomes in roughly three-quarters of observations, both far in advance of election day and during the final week.

In the early 2000s, North American Derivatives Exchange, Inc. (NADEX) became the first CFTC-regulated prediction market trading contracts on financial indicators like the Consumer Price Index. NADEX established a compliant framework for event-based contracts in the US and later became the legacy exchange acquired by Crypto.com in 2022. 

The 2020s welcomed new entrants Polymarket, Kalshi, Crypto.com, Limitless, and MYRIAD, all of which now use blockchain technology, oracles, in tandem with the US regulatory clarity fronted by US President Donald Trump’s pro-crypto administration.

US Presidential elections started prediction market demand

During the 2024 US presidential election, Kalshi and Polymarket generated over $4.5 billion in volume during the month alone, with Polymarket drawing 93% of that trading. After the election, monthly trading cooled to $1.5–2 billion, likely because there were no impending “mainstream” events to place bets on.

By mid-2025, both platforms had expanded their distribution channels and media coverage by adding several other categories and event types. Partnerships with outlets and organizations, including Google Finance, CNN, CNBC, UFC, Yahoo, Robinhood, and the NHL, extended their reach into finance and entertainment. 

Polymarket secured up to $2 billion from Intercontinental Exchange at an $8 billion valuation, while Kalshi raised $1 billion at an $11 billion valuation, and both markets are now available in more than 140 countries.

“When election odds or event probabilities appear alongside traditional financial data, prediction markets start becoming a Core part of how people understand what’s happening in the world. That unlocks entirely new demographics,” said Lee Poettcker, Product Manager at UMA.

Polymarket participants have been consistent in predicting and correctly pricing outcomes, achieving a 90–95% success since its inception. 

In many categories, Polymarket and Kalshi aggregate dispersed information into single, tradable signals that collect enough intelligence to anticipate real-world events. The former recorded roughly $21.5 billion in notional volume, with Kalshi accounting for $17.1 billion since January this year. 

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