Kalshi Dominates Prediction Markets in 2025: Surpasses Polymarket with 60% Market Share

• How Did Kalshi Achieve Market Dominance?
• What's Driving the Prediction Market Gold Rush?
• Polymarket's Counterattack: A $9B Comeback?
• Regulatory Tightrope: Innovation vs. Gambling Laws
• FAQ: Your Prediction Market Questions Answered

In a stunning shift for the prediction market industry, Kalshi has overtaken rival Polymarket to capture over 60% of global market activity following a $300 million funding round that doubled its valuation to $5 billion. The platform's explosive growth—from $300M to $50B in annual trading volume—comes amid regulatory breakthroughs, product innovations like parlay-style wagers, and integrations with major brokerages. Meanwhile, Polymarket counters with its own expansion plans, including a potential U.S. relaunch and $9B valuation target. This DEEP dive unpacks the high-stakes battle reshaping how traders bet on everything from elections to sports.

How Did Kalshi Achieve Market Dominance?

When Sequoia Capital and Andreessen Horowitz led Kalshi's latest funding round on October 11, 2025, they were betting on a platform that had quietly revolutionized event contracts. The numbers tell the story: Kalshi's trading volume skyrocketed 16,500% year-over-year to $50 billion, according to Dune Analytics. Much of this growth stems from their June 2025 regulatory win—the CFTC dropped its appeal against election contracts, allowing Kalshi to capitalize on the $875M 2024 U.S. election cycle. "We knew political markets WOULD be big, but the sports betting integrations with Robinhood and Webull? That caught even us off guard," admits CEO Tarek Mansour in our exclusive analysis.

What's Driving the Prediction Market Gold Rush?

The sector's transformation mirrors crypto's early days—volatile but packed with potential. Consider these 2025 milestones:

• Liquidity Boom: Polymarket's recent Bitcoin deposit option boosted monthly users to 259K (+43% volume)
• Mainstream Adoption: Kalshi's brokerage integrations let users trade event contracts like stocks
• Regulatory Thaw: CFTC's softened stance contrasts with state regulators' gambling concerns

BTCC market analysts note: "These platforms aren't just prediction markets anymore—they're hybrid financial instruments. When DraftKings shares dipped 3.81% post-Kalshi's funding news, it signaled real disruption."

Polymarket's Counterattack: A $9B Comeback?

Don't count Polymarket out yet. Insider reports suggest Founders Fund may bankroll a U.S. relaunch, potentially valuing the firm at $9-10B. Their QCX LLC acquisition secured a crucial CFTC license, while Grok chatbot integration on X platform brings AI-powered insights. "The bitcoin move was smart," admits a BTCC trader. "But Kalshi's head start in political markets gives them first-mover advantage through the 2026 midterms."

Regulatory Tightrope: Innovation vs. Gambling Laws

State regulators' warnings about sports contracts being "unlicensed gambling" haven't slowed Kalshi's momentum—yet. Mansour's response? "If regulators aren't asking questions, we're not innovating." The CFTC's dropped lawsuit suggests federal agencies may take a more permissive stance than states. This creates a bizarre patchwork where election contracts are greenlit (thanks to CFTC oversight) while sports markets face scrutiny.

FAQ: Your Prediction Market Questions Answered

How does Kalshi make money?

Kalshi charges 1-5% fees on contract settlements, plus premium features for institutional traders. Their brokerage partnerships also generate revenue shares.

Is my money safe on these platforms?

Both companies use escrow accounts for contract payouts. However, prediction markets carry inherent risk—never wager more than you can afford to lose.

What's next for this industry?

Expect more AI integration (like Polymarket's Grok tie-up) and potential IPO moves. Kalshi's 140-country expansion could trigger regulatory battles abroad.