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Kalshi enters cryptocurrency prediction market

TL;DR

  • Kalshi now allows betting on cryptocurrency prices in dollars, riding the crypto wave.
  • The move aligns with a surge in digital assets and prediction markets.
  • It comes as rival Polymarket faces U.S. restrictions, showing regulatory hurdles.

Kalshi, the regulated prediction market platform based in New York, has announced its foray into the cryptocurrency prediction market, marking a significant move as digital currencies experience a resurgence after a two-year downturn.

Expanding market offerings

Starting Monday, Kalshi will allow clients to wager on five different cryptocurrency price outcomes, with examples including predictions on when Bitcoin will reach $100,000 and the highest price Ethereum‘s Ether will attain in 2024. 

The platform, the sole regulated prediction market in the U.S., will continue to operate in U.S. dollars, consistent with its existing market structure. Additional markets are scheduled to launch on Tuesday, giving traders more options to engage with cryptocurrency-related predictions.

Kalshi’s venture into the cryptocurrency market coincides with the current bullish sentiment surrounding digital assets. Factors such as the introduction of Bitcoin exchange-traded funds (ETFs) have contributed to a price surge, with the 20 Index reporting nearly a 50% increase since the beginning of the year. This positive trajectory has prompted Kalshi to tap into investors’ growing interest in cryptocurrency speculation.

Prediction markets gain momentum

The move by Kalshi also reflects a broader resurgence in prediction markets, which mainstream financial activities have traditionally overshadowed. Recent forecasts by Bitwise Investments researchers suggest that prediction markets could attract over $100 million in stakes, emerging as a prominent application within the cryptocurrency space by 2024. 

Public figures like former U.S. President Donald Trump have showcased their engagement with crypto-based prediction markets, signaling a growing acceptance and adoption of this form of speculative trading.

Kalshi’s expansion into cryptocurrency prediction markets comes as Polymarket, its competitor, faces restrictions in the U.S. due to a settlement with the Commodity Futures Trading Commission (CFTC). As the only licensed prediction market regulated by the CFTC, Kalshi can capture a portion of the market share from U.S. traders seeking exposure to cryptocurrency price movements without directly trading digital assets. 

However, Kalshi’s regulatory standing is not without challenges, as the platform is currently embroiled in a legal dispute with the CFTC regarding its listing of markets related to political outcomes.

The regulatory environment for prediction markets is evolving, with CFTC Chairman Rostin Benham indicating that the agency plans to propose new regulations in the coming months. This move aims to establish a clear framework for the operation of prediction markets, potentially providing more clarity and oversight in an increasingly popular segment of speculative trading.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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