Kalshi won regulatory approval that paves the way for margin trading, giving the prediction market platform a product that could make it more attractive to hedge funds and other institutional investors as the industry moves deeper and deeper into traditional finance.
The approval covers a futures commission dealer license through its subsidiary Kinetic Markets LLC, according to a March 24 filing by the National Futures Association. Kalshi CEO Tarek Mansour said this week that a margin product would be available soon and described capital efficiency for institutions as a key priority.
The move comes just after Kalshi raised more than $1 billion in a funding round that valued the company at $22 billion, roughly double its reported valuation of $11 billion in December. The new valuation reflects investors’ belief that prediction markets are evolving from a retail novelty to a broader trading and hedging venue with real appeal to Wall Street firms.
This growth has been rapid. Bloomberg reported that weekly notional volume on Kalshi surpassed $3 billion earlier this month, while another report from Barron’s indicates that the company recently reached $10.4 billion in monthly trading volume. March Madness has become the platform’s most popular category, even as the NCAA works to end betting on college sports through prediction markets.
Kalshi also builds the plumbing needed to serve larger traders. Recent reports show that major brokers are moving to give hedge funds access to Kalshi’s markets, while the company has partnered with FIS on clearing infrastructure aimed at institutional adoption and with Tradeweb to distribute forecast market data to professional investors.
This month, top U.S. exchange executives called for clearer rules as prediction markets add users and expand to contracts related to politics, economics, sports and geopolitics. Cboe also announced plans to launch more advanced prediction market contracts with partial payouts, demonstrating that established exchange groups are increasingly viewing event trading as a real growth area rather than a fringe product.
Kalshi recently said it would block politicians, athletes, arbitrators and others with direct influence on certain exchange-related market outcomes, and California on Friday banned state officials from using insider knowledge to bet on prediction platforms such as Kalshi and Polymarket. A bipartisan bill introduced this week would also ban sporting event contracts in federally regulated prediction markets, underscoring that the industry’s next phase of growth will likely come with more onerous compliance requirements.
