Here’s a riddle: Two startups are competing to win a hot new sector. How can it be that Startup A, which appears to have the early lead in the market, is valued at $5 billion, while Startup B—which is not even available in the U.S. right now—is worth nearly twice that? The answer probably has something to do with crypto.
The scenario above describes the race between Kalshi and Polymarket to dominate prediction markets, a field that has been around for years but only took off in 2024 thanks to a more permissive regulatory environment. Right now, Kalshi is racking up new U.S. users, who are betting on everything from sports to political events, while Polymarket is still getting its paperwork in order to operate legally in this country. Both firms announced new funding rounds last week, but Polymarket made the bigger splash with a valuation of $9 billion.
