Prediction market platforms recorded record activity estimated at $2 billion over the past week. This increase in volume has been accompanied by fierce competition, particularly with the arrival of challenger Limitless. Here’s an update.
Predictive markets: $2 billion in volume
At the end of 2024, the Polymarket platform brought predictive markets to the forefront of the crypto scene with record volumes recorded during the US presidential campaign. However, its services were banned in the United States following a regulatory decision in 2022.
The situation is very different today, since the platform announced last September that it would be reintroduced nationally amid regulatory easing by the Trump administration. This is good news, especially considering the record volume of $2 billion recorded on this market last week.
This activity is largely driven by the ongoing election for the next mayor of New York City, which will be decided next month, but also by speculation about which team will win the Super Bowl in February next year.
This resurgence in activity demonstrates the significant potential of prediction markets, particularly since the parent company of the New York Stock Exchange (NYSE), Intercontinental Exchange, decided to invest a record $2 billion in Polymarket. This opportunity also allowed its CEO to become the youngest billionaire on the Bloomberg Billionaires Index.
Fierce competition
This craze is currently the focus of fierce competition to capture market share. This is particularly true since the Kalshi platform can finally play in the same regulatory category as Polymarket, to the point of overtaking it last September with higher volumes.
How can this new momentum be explained? Quite simply because Kalshi recently added sports betting to its prediction market. This strategy was “patiently developed over several months before launching markets dedicated to the National Football League (NFL) and college football,” according to sports betting consultant and prediction market analyst Dustin Gouker. As a result, these markets currently account for more than 70% of its business.
The two platforms are now neck and neck, with an almost equivalent volume estimated at around $1 billion per week. At the same time, a new competitor based on Layer 2 Base, called Limitless, has just closed a $10 million seed funding round, with a Token Generation Event (TGE) for its LMTS cryptocurrency announced as imminent.
In response to this situation, new offerings are emerging with the prospect of “building new financial primitives for trading,” according to Kalshi’s crypto manager, John Wang. For its part, Polymarket now offers “up/down” prediction markets applied to the price of Bitcoin over a 15-minute period.
