Valued – Earlybirds Invest

Crypto prediction market platform Kalshi has raised $185 million in a Series C round led by Paradigm, reaching a $2 billion post-money valuation.

“People choose to work at Kalshi not because of the money we’ve raised, but because of our ambition: build the most important financial market on the planet,” said CEO Tarek Mansour, celebrating the news on X.

The round was led by crypto venture firm Paradigm with participation from Sequoia, Multicoin, Neo and Bond Capital, and Citadel Securities.

Early Days for Prediction Markets

Paradigm’s Matt Huang compared the sector to crypto’s early days and predicted that it could become a trillion-dollar asset class.

“Prediction markets remind me a lot of what crypto felt like a decade ago: a nascent asset class on a path to trillions.”

Mansour stated that the funding would go towards scaling up the firm’s technology team so it can integrate with more brokers. It has already partnered with Robinhood Markets and Webull, which offer their customers access to Kalshi’s contracts, reported the Wall Street Journal.

The timing is notable as Kalshi’s main rival, Polymarket, is simultaneously raising $200 million at around a $1 billion pre-money valuation from Peter Thiel’s Founders Fund.

Kalshi has an edge for the premium valuation. It operates legally in the United States under CFTC regulation, while Polymarket has been banned from the US since 2022 and faces restrictions in multiple other countries, including the UK, France, Singapore, and Thailand.

Nevertheless, Nevada and New Jersey state gambling regulators are actively trying to block Kalshi’s sports betting operations, arguing that sports betting should be regulated at the state level, not federally.

In February, the CFTC probed Crypto.com and Kalshi’s Super Bowl event contracts seeking clarity on derivatives compliance.

Prediction Market Volumes Fall

Prediction market platforms such a Polymarket surged in popularity during the US presidential elections in November; however, post-election trading volumes have declined significantly.

Polymarket’s monthly trading volume for May was around $1.1 billion, down 56% from its November peak of around $2.5 billion, according to Dune Analytics.

Kalshi pivoted heavily into sports betting, with almost 80% of daily trading volume in March and April being sports-related.

Both companies are capitalizing on growing interest in prediction markets, though they’re taking vastly different approaches to regulation and market access.

SPECIAL OFFER (Sponsored)
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!