Prediction Markets Hit $2.34b Weekly Volume as Kalshi Matches Polymarket’s Billion-Dollar Pace

One striking development in market microstructure emerged in late October 2025, when weekly notional volume across prediction markets surged to a record $2.34 billion, eclipsing peak activity observed during the 2024 U.S. election cycle and reflecting a greater than 628% increase from the mid‑April 2025 trough of approximately $277 million; this escalation, driven by pronounced investor appetite, exceptional sports‑event contract turnover, and concentrated liquidity on leading venues Kalshi and Polymarket—which each recorded roughly $1.05 billion in weekly volume—underscores the confluence of regulatory clarity favoring exchange‑regulated futures frameworks, substantial capital inflows that have materially re‑rated platform valuations, and an evolving competitive dynamic between regulated, fiat‑native operators and crypto‑centric, decentralized counterparts that together are redefining the boundary between traditional wagering and emergent financial markets. Market Liquidity has been central to this transformation, as the coalescence of concentrated order flow on a small number of high‑visibility venues produced tighter bid‑ask spreads, deeper visible book depth, and a reduced cost of immediacy for large institutional and retail participants, effects that were amplified during major sports fixtures and high‑profile political windows where temporary spikes in informed and liquidity‑seeking trading materially elevated turnover. This concentration of liquidity parallels the role of liquidity pools in decentralized finance, where shared resources enable continuous market making without traditional order books. User Demographics have shifted in parallel with these liquidity dynamics, as platforms report an increasingly heterogenous constituency of market participants, with professional traders, quant funds, and proprietary desks allocating capital alongside retail bettors and crypto‑native speculators, a composition that has altered intraday volume profiles, heightened demand for advanced order types, and increased the prevalence of cross‑venue arbitrage strategies. The dual leadership of Kalshi and Polymarket illustrates the broader structural bifurcation in the sector, with Kalshi’s regulated, fiat‑cleared model attracting risk‑averse institutional flows and regulatory partnerships, while Polymarket’s decentralized architecture continues to mobilize blockchain‑native liquidity and crypto counterparties, both routes having been validated by substantial valuation uplifts and major investments from strategic backers. Taken together, these developments point to a maturing ecosystem in which liquidity provisioning, participant composition, and regulatory regimes interact to shape market efficiency, price discovery, and the competitive topology of prediction exchanges. Additionally, recent industry moves such as DraftKings’ acquisition of Railbird Technology highlight growing strategic interest from mainstream gaming firms in the event‑contract space, signaling further integration with established sports betting and fantasy ecosystems and increased potential for institutional adoption driven by Kalshi’s $300M raise. A notable corroborating datapoint is that weekly platform trading tallies were independently reported by Dune analytics.