Is the post-election era no longer doomed? Raising $2.3 billion in funding, the prediction market turns the tide with this move.

Written by: Prathik Desai

Compiled by: Chopper, Foresight News

In the past week, the two giants of the prediction market have received new funding.

The US-regulated prediction market Kalshi announced that it has secured over $300 million in new financing, reaching a valuation of $5 billion, led by Sequoia Capital with participation from a16z. This valuation represents an increase of approximately 2.5 times compared to three months ago. This financing comes as Kalshi is experiencing significant business expansion: its services are now available in 140 countries, and internal data shows that its annual trading volume is approaching billions of dollars, marking a significant leap from last year's initial stages.

At the same time, the crypto-native prediction market Polymarket revealed that it has obtained a strategic investment of up to $2 billion from the parent company of the New York Stock Exchange, Intercontinental Exchange, with a post-investment valuation of $9 billion.

In recent months, Kalshi's trading volume has surpassed Polymarket. In the past seven weeks, Kalshi has led Polymarket in nominal trading volume (i.e., the total value of all contracts in the prediction market) for six of those weeks.

Since September, the weekly nominal trading volume of the prediction market has steadily increased, with weekly trading volumes exceeding 1.2 billion dollars for the past four weeks. Although it has not yet reached the peak during last year's election, the overall trend is steadily approaching the 2 billion dollar mark.

Currently, Kalshi and Polymarket account for 96% of the total nominal trading volume, holding an absolute dominant position; meanwhile, smaller platforms like Limitless and Myriad Markets are also gradually developing.

For the week ending October 6, Limitless had a trading volume exceeding $44 million, while Myriad Markets reached $6 million, more than a sixfold increase compared to a month ago.

Where does the heat come from?

After the excitement of the election fades, traders in the prediction market are turning their attention to other events that people pay daily attention to.

In October 2024, among the trading volumes of Kalshi and Polymarket, the proportion related to politics and elections exceeded 95% and 83%, respectively; however, this structure has gradually shifted towards sports.

The betting volume for sports on both platforms has already taken a dominant position. This shift stems from the characteristics of human behavior: people tend to focus more on events that occur frequently and have short cycles.

The sports field has a large number of short-term events: match outcomes, player lineups, injury situations, individual performances, etc. All of these can generate countless micro-events, providing rich scenarios for betting.

This transformation is most evident in Kalshi: in December 2024, sports trading accounted for less than 5% of Kalshi's weekly nominal trading volume; it rose to 15% in February 2025; surpassed 90% in March; and thereafter, this proportion remained above 80% in most weeks.

On the other hand, the share of sports trading on Polymarket has also doubled, rising from about 15% last year to 40% now.

Cryptocurrencies still hold a place in prediction markets. Although they do not account for a large trading volume, the prices of cryptocurrencies related to events at the time of ETF issuance still provide plenty of opportunities for speculation, which is particularly evident on Polymarket. However, on Kalshi, trades related to cryptocurrencies have struggled to reach a 15% share in most months.

Differentiation strategy of leading platforms

From the latest trading category share of the two major platforms Kalshi and Polymarket, it is evident that they are following entirely different strategies.

Kalshi's trading core is heavily biased towards sports, followed by politics and cryptocurrency. This reflects the platform's positioning: focusing on the speculative needs of retail investors, which require standardized, rule-driven markets. For example, events such as weather, energy, and interest rate cuts are layered on top of sports to ensure there are ongoing betting opportunities every week.

In contrast, Polymarket's trading categories are built around three main pillars: sports, politics, and cryptocurrency. The proportion of these will adjust according to current news events and industry dynamics to fit mainstream market narratives.

It is not difficult to see from the chart data that after the frenzy of last year's election, the liquidity of the prediction market did not disappear, but rather was redistributed to categories that traders consider valuable.

These categories help the platform build a sustainable business model, maintaining activity even during trading off-seasons. However, politics may still be one of the core areas, with events such as elections, debates, and government policies potentially triggering sudden spikes in trading volume, even if they are seasonal.

The cryptocurrency, economic, and financial markets play an important supplementary role. Trading around events such as price fluctuations, ETF announcements, Federal Reserve meetings, and policy-making has attracted aggressive traders who are keen on fast-paced markets, as well as macro enthusiasts who wish to price the economic narrative.

When different types of traders coexist in speculative markets, the categories of bets become richer and deeper. Imagine: bets on the NFL on Sunday could be paired with weather forecasts and natural gas price trades; NBA player injury odds could be paired with predictions of the Consumer Price Index (CPI) range and campaign fundraising amounts.

If prediction markets can make checking prices as habitual as checking sports scores, the platform's user retention rate will significantly improve. Whether in the crypto market or traditional markets, retention rate is key to breaking the dependence on seasonal cycles.

If this goal can be achieved, the public's perception of prediction markets will change. It will no longer be seen as a platform focused solely on specific events, but rather as a barometer reflecting the probabilities of everyday events.