Prediction market platforms Kalshi and Polymarket are in preliminary discussions to raise new funding at valuations approaching $20 billion each, according to a report by the Wall Street Journal. This would represent a near-doubling of their valuations from late 2025, highlighting surging investor interest in the sector.
Kalshi, founded in 2018, raised $1 billion in December 2025 at an $11 billion valuation and has achieved an annualized revenue run rate of approximately $1.5 billion. Polymarket, founded in 2020, was valued at $9 billion in October 2025 after a commitment of up to $2 billion from Intercontinental Exchange (ICE).
The combined monthly trading volume for both platforms skyrocketed to roughly $18.3 billion in February 2026, a dramatic increase from under $2 billion in August 2025. Kalshi leads in monthly volume, largely driven by sports contracts, with weekly notional volume of $1.87 billion compared to Polymarket's $1.9 billion. Open interest exceeds $400 million for Kalshi and $360 million for Polymarket.
The growth occurs amidst increasing regulatory scrutiny and competition. U.S. legislators have proposed limits on contracts involving war, sports, and government actions. Polymarket restricts U.S. user access, while Kalshi operates fully domestically under Commodity Futures Trading Commission (CFTC) approval. Major competitors like Coinbase, Robinhood, DraftKings, and traditional exchanges Nasdaq and Cboe are also exploring or have launched prediction market offerings.
In a related interview with Invezz, Ryan Kirkley, CEO of Global Settlement Network, warned of significant structural risks as prediction markets mature. He highlighted concerns about "insider trading, market manipulation, and whether these platforms can tip from forecasting tools into instruments of influence." Kirkley pointed out regulatory blind spots, noting there is no clear rule equivalent to SEC Rule 10b-5 prohibiting trading on privileged political or policy information. He also raised the alarming possibility that large financial incentives could create motives to influence real-world outcomes, such as elections or geopolitical events.
The potential $20 billion funding rounds underscore the sector's rapid evolution from a niche concept to a mainstream financial venue attracting serious institutional capital and regulatory attention.
