Prediction markets are not a niche crypto subculture anymore. They are mainstream finance. 

Kalshi, one of the world’s largest prediction markets that accepts bitcoin deposits, announced it has raised $300 million in new funding at a $5 billion valuation and will soon open access to users in more than 140 countries, according to The New York Times. 

The round, led by Sequoia Capital and Andreessen Horowitz with participation from CapitalG, Coinbase Ventures, Paradigm, and others, more than doubled Kalshi’s valuation from its previous raise in June. 

The company’s annualized trading volume has surged from $300 million last year to an expected $50 billion.

Kalshi’s ascent comes during a boom in online prediction markets, where people can trade contracts tied to the outcomes of real-world events. These events could be elections, sports events, inflation rates, or even the weather. 

These markets allow traders to express views on future events and profit if their predictions are correct, functioning like a fusion of betting and derivatives trading.

Prediction markets are booming in volume

The timing of Kalshi’s announcement highlights the growing competition in the sector. Earlier this week, rival platform Polymarket revealed that the parent company of the New York Stock Exchange plans to invest up to $2 billion.

As of the week of September 29, Kalshi had over $956 million in trading volume on its platform, nearly double the volume of Polymarket, according to data provider Dune.

Kalshi’s recent growth has been fueled by sports markets, particularly after it introduced parlays — multi-leg bets common in traditional sports wagering. 

That move has rattled established sportsbooks like DraftKings and FanDuel, whose shares have dropped sharply in recent weeks. 

Kalshi has also expanded distribution through integrations with brokerages including Robinhood and Webull, allowing users to trade prediction contracts as easily as buying stocks.

Kalshi’s regulatory hurdles

Despite its expansion, Kalshi faces growing regulatory scrutiny. While it operates under oversight from the U.S. Commodity Futures Trading Commission (CFTC), several state regulators have challenged its sports-related contracts, arguing they effectively circumvent state-level gambling restrictions. 

“Every time there’s a new type of financial innovation, there’s always a series of questions around regulation,” co-founder and CEO Tarek Mansour said per NYT “If there weren’t, what you’re doing is probably not meaningful or innovative enough.”

Kalshi’s regulatory compliance remains a strategic advantage, particularly as Polymarket moves to regain U.S. access through its recent acquisition of a CFTC-licensed exchange. Still, Kalshi is looking beyond regulation as a differentiator. 

Kalshi accepts bitcoin and other crypto deposits through a partnership with ZeroHash.