Prediction Market Volumes Hit $701M as US Regulatory Scrutiny Intensifies

• Prediction markets were under the regulatory highlight at the start of this month when an anonymous user on Polymarket bet around $30,000.
• A lot of crypto exchanges, such as Coinbase and Gemini, have also revealed plans to amalgamate prediction markets.

The recent US regulatory action looking to prohibit prediction markets has surged activity in the first weeks of this year, having trading volumes hit a milestone with $701.7 million on January 12. 

Two-thirds of total trading volume is attributed to prediction market Kalshi, with total trading volume sitting at $465.9 million. Other markets, such as Polymarket and Opinion, recorded $100 million worth of trades, as reported by Dune Analytics. 

The $701.7 million milestone is achieved by leaving behind its previous record of $666.6 million set the day before and making Kalshi the leader of the sector. Prediction markets are now one of the buzzing topics in the crypto industry, having had adoption increase exponentially since August. 

Increasing Prediction Markets Demand

A lot of crypto exchanges, such as Coinbase and Gemini, have also revealed plans to amalgamate prediction markets. Along with this, self-custody wallets such as MetaMask have also revealed similar plans. 

The amalgamations and increasing trading volumes have captivated interest from Wall Street, with market leaders Polymarket and Kalshi now sitting at multibillion-dollar valuations. 

Prediction markets were under the regulatory highlight at the start of this month when an anonymous user on Polymarket bet around $30,000 that Venezuela’s Nicolas Maduro would be ousted as president just a few hours before his capture. This bet gave back over $400,000 and ignited worries about insider knowledge. 

The policymakers of New York are also set to review legislation looking to prohibit some markets associated with politics, sports and others. Some states that have tried to impose restrictions on prediction market operators include Connecticut, New York, Nevada and New Jersey. 

A Tennessee federal judge has ordered state regulators to stop taking action against Kalshi on Monday on a temporary basis. Previously, it had sued the state after being ordered to stop offering sports event contracts. 

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