Recent actions taken by US regulators to restrict prediction markets have not hindered their trading activities, as they recorded a stunning $701.7 million in transaction volume on Monday. The prominent prediction market, Kalshi, led this surge, accounting for approximately $465.9 million of the total. Other competitors like Polymarket and Opinion also made notable contributions, reaching around $100 million in trades according to data from Gate Research.
This recent total surpassed the previous record of $666.6 million set just the day prior, demonstrating Kalshi’s dominance in the market.
Daily Trading Volume
Daily trading volume on prediction markets since September 2024. Source: Dune Analytics
Notably, since August, prediction markets have surged in popularity within the cryptocurrency sector. Major exchanges, including Coinbase and Gemini, have begun or are planning to implement prediction markets, indicating a shift in the market landscape.
These moves have attracted considerable attention from Wall Street, with Kalshi and Polymarket both achieving multibillion-dollar valuations.
Regulatory Examination of Prediction Markets
Earlier in January, prediction markets faced regulatory scrutiny when an anonymous user on Polymarket placed a sizable bet of about $30,000 on Venezuelan President Nicolás Maduro being ousted, mere hours before he was captured. This bet yielded over $400,000, raising alarms regarding possible insider trading.
New York lawmakers are re-evaluating potential legislation aimed at banning certain markets associated with politics or sports. Other states, including Connecticut, New York, Nevada, and New Jersey, have all sought to impose restrictions on prediction market operations, which has led to legal disputes.
Recently, a federal judge in Tennessee temporarily prohibited state regulators from acting against Kalshi, which was ordered to halt its offering of sports contracts. Furthermore, news emerged this week indicating that Ukraine blocked access to Polymarket last December, categorizing prediction markets as gambling activities.
