How Kalshi And Polymarket Are Trying Copy The Crypto Playbook

Prediction markets are expanding beyond traditional wagers, with Polymarket launching perpetual futures contracts, or "perps." These high-risk trades, a significant part of the crypto business, differ from traditional futures by not having a fixed expiration date, allowing traders to keep positions open indefinitely with sufficient collateral. This structure has driven substantial trading volume in crypto, particularly outside the US, with perp trading growing almost 50% to $86.2 trillion in 2025. This move follows reports that rival Kalshi also plans to offer crypto trading, including perpetuals. Such expansion could place prediction market platforms in direct competition with major financial companies like Coinbase and Robinhood, shifting their focus from niche betting to the future of retail trading. Polymarket's deeper dive into derivatives, where bets are made on future asset values, is seen as a defensive move to compete with crypto exchanges. Perps, which are high-risk and high-reward, have seen explosive growth since the Trump administration, which is pro-crypto. The Commodity Futures Trading Commission is working to onshore perps, creating a "land grab" phase for companies like Polymarket and Kalshi. However, prediction markets face intense scrutiny over allegations of insider trading and outcome manipulation. Adding crypto is expected to prompt further regulatory oversight. The success of these contracts could lead to their expansion beyond crypto to other asset classes, potentially increasing market volatility. The future of these companies hinges on whether they remain niche platforms or evolve into full-service exchanges. Competing against established platforms like Robinhood, with its broader offerings and large user base, will be challenging. Polymarket has made the first move, intensifying competition between prediction markets and crypto exchanges for traders and market share, potentially blurring the lines between them.