Kalshi eyes Wall Street as prediction markets surge

Kalshi is trying to turn a market built on bets into a tool Wall Street can use to manage risk. The New York-based prediction-market firm said institutional trading volume on its platform had risen 800% in six months as it broadened beyond sports and pop culture into contracts tied to growth, inflation, Federal Reserve decisions and S&P 500 levels.

The company’s pitch is straightforward: event contracts can function less like a novelty wager and more like a hedging instrument. Kalshi has said it wants to scale adoption across hedge funds, asset managers, proprietary trading firms and insurance companies, a sign that prediction markets are moving from retail speculation toward the kind of macro trade that firms use to express views on rates, growth and volatility.

That push has arrived with the company’s biggest financing yet. Kalshi announced a $1 billion Series F round at a $22 billion valuation on May 7, 2026, led by Coatue with participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley and ARK Invest. The company said it now accounts for more than 90% of U.S. prediction market activity and the majority of global volume.

The opportunity for Kalshi rests on a regulatory foundation that makes the business look more like an exchange than a sportsbook. Kalshi received approval from the Commodity Futures Trading Commission in November 2020 as the first federally regulated exchange dedicated to event contracts. The CFTC has said prediction markets have existed in regulated U.S. markets for more than two decades and can help forecast, plan for and hedge future events.

That same regulatory framework also explains why the line between finance and gambling remains contested. On February 25, 2026, the CFTC’s Enforcement Division issued an advisory after two enforcement cases involving misuse of nonpublic information and fraud on KalshiEX LLC, underscoring how closely the agency is watching the market even as trading volumes climb.

Kalshi has responded by courting institutional credibility. In March 2026, it announced a collaboration with ARK Invest focused on institutional adoption, analytical insight and risk management. It also formed a strategic partnership with Tradeweb, whose chief executive, Billy Hult, said prediction markets may become a tool for institutions to dynamically assess macro risk and allocate capital more effectively.

The CFTC’s March 2026 Advance Notice of Proposed Rulemaking added another layer of scrutiny, opening a public comment process on event-contract rules and prohibited contract types. If banks, asset managers and insurers increasingly treat prediction markets as mainstream financial instruments, the consequences could be significant: deeper liquidity, broader use in hedging and a sharper regulatory debate over where forecasting ends and wagering begins.