1. Legal compliance and US market access Poly Market, built on the blockchain (Polygon), was fined $1.4 million by the CFTC in 2022 and banned from providing services to U.S. users, relying only on VPNs and overseas users, limiting its growth in the U.S.Kalshi, by contrast, is a “designated contract market” (DCM) fully regulated by the CFTC. It sued the CFTC in 2023 for expanding categories (politics, sports, etc.) and won the case, getting a legal moat that can be traded in US dollars (no cryptocurrency needed). This attracts conservative retail investors who prefer KYC, security over cryptocurrency volatility.Flip result: Kalshi explodes in the 2024 election and the 2025 sports season. By September 2025, two weeks in a row have surpassed Polymarket in weekly trading volume, gaining dominance in the U.S. forecast market.
2. Large scale loan book Polymarket also raised big money: $1 billion at $8 billion pre-money and $9 billion post-money valuations by the end of 2025, spurred mainly by crypto narratives and possible token airdrop.But Kalshi raised $1 billion in November 2025, and the valuation jumped from $5 billion to $11 billion in a few weeks. Investors include Sequoia, CapitalG (Alpha Growth Fund) betting that Kalshi's compliance route will lead to mainstream adoption. Why This will flip the game: money allowed Kalshi to accelerate expansion, integrate with Robinhood (with massive retail flows), and launch official markets with alliances like NHL. Polymarket’s crypto premium (and Ethereum eco) makes its global valuation brighter, but Kalshi won the U.S. market with “old school trust and regulation” — both downloads and active users.
3. The momentum of trading volume and mental share By September 2025, Kalshi hit $2 billion in transaction volume in 30 days, officially overtaking Polymarket. At the beginning of December, its 24-hour mind share on X reached 60% and Polymarket 35% (analyzed by Kaito AI), rising 607 basis points a day. Main drivers: Sports (NFL, NHL) and post-election political market. Kalshi’s dollar settlement and low spread attract US betters; Polymarket’s crypto bet attracts global degens, but also faces manipulation disputes (e.g. concerns about foreign funding).Trend: Both use CLOB (central limit order book) and focus on movement and politics, but Kalshi’s manual decision mechanism builds trust and reduces controversy than Polymarket’s decentralized UMA Oracle.
4. Bigger ecological layout Collaboration: Kalshi integrates with Robinhood and enters Google Finance and AI tools in November 2025, giving millions of average users a view of prediction probabilities. Polymarket received NYSE support (up to $2 billion investment) and re-entered the U.S. through M&A, but still catching up.
Challenge for both sides: both competing with sports betting rivals like Draft Kings (Draft Kings shares fell after Kalshi and NHL news) and facing legal challenges in the states. But the prediction market is positioning itself as a "truth machine" rather than a gamble (e.g. Polymarket CEO Shayne Coplan called it "the most accurate tool for humanity" in 60 Minutes) helps mainstream. Crypto vs traditional finance: Polymarket’s on-chain advantages make it globally scalable, but Kalshi’s regulatory and fiat model is more likely to win in the US retail market, especially in the new crypto winter.
