Kalshi's $5B Valuation Signals Prediction Markets' Legitimacy as Asset Class

Kalshi, a U.S.-regulated prediction market operating under the Commodity Futures Trading Commission (CFTC), has secured $300 million in new capital, valuing the company at $5 billion, according to The New York Times . This marks a significant milestone for the platform, which now operates as the world's largest prediction market by trading volume, commanding over 60% of global activity . The funding round was co-led by Andreessen Horowitz (a16z) and Sequoia Capital, with additional participation from Paradigm, CapitalG, Coinbase Ventures, and other prominent investors .

Kalshi's rapid growth has been driven by a surge in trading volume, which has expanded from approximately $300 million in 2024 to an estimated $50 billion in 2025 . The platform's international expansion, opening access to users in over 140 countries, has further solidified its dominance. This expansion creates a unified global liquidity pool, differentiating Kalshi from fragmented, region-specific competitors . The platform's U.S.-based operations previously restricted its user base, but the new funding enables it to scale globally while maintaining CFTC compliance .

The valuation leap follows a $185 million Series C raise in June 2025, which valued Kalshi at $2 billion . The latest round, however, reflects heightened institutional confidence, with demand from nearly every major firm in Silicon Valley and Wall Street . Kalshi's user base has grown 20× in the past year, and its trading volume has increased 200×, outpacing rival Polymarket . This growth has been fueled by sports betting, particularly complex parlays, which have disrupted traditional sportsbook operators like DraftKings and FanDuel .

Regulatory challenges persist, however. While Kalshi cleared a federal hurdle with the CFTC earlier in 2025, it now faces lawsuits in several U.S. states, which argue its sports-related contracts resemble unlicensed gambling . Tarek Mansour, Kalshi's co-founder and CEO, has defended the platform's innovation, stating that regulatory scrutiny is inevitable for transformative financial models . Meanwhile, Kalshi's integration with platforms like Robinhood and Webull has enhanced accessibility for retail traders, bridging the gap between prediction markets and traditional finance .

The platform's hybrid model-combining CFTC oversight with blockchain-based integrations-has attracted both institutional and crypto-native capital. Kalshi now accepts deposits in cryptocurrencies like Bitcoin and Solana, leveraging decentralized infrastructure to expand liquidity . This strategy positions it at the intersection of traditional finance and Web3, with investors betting on its potential to become a $95.5 billion industry by 2035 .

Kalshi's success also highlights the broader legitimization of prediction markets as a financial asset class. By enabling traders to bet on real-world events-from elections to macroeconomic data-Kalshi has demonstrated the utility of event-driven contracts as tools for hedging and information aggregation . As it scales globally, the platform's ability to navigate regulatory complexities and maintain its technological edge will be critical to sustaining its market leadership.