tech
Prediction markets prepare to invade one of crypto’s biggest and riskiest trades
There’s a land grab underway in the U.S. for perpetual futures, one of the biggest and riskiest parts of crypto — and prediction markets want a piece of it.
TL;DR
- Kalshi and Polymarket are reportedly seeking to enter the U.S. perpetual futures market.
- Perpetual futures ('perps') are futures contracts without expiration dates and offer high leverage, accounting for over 70% of centralized crypto exchange volume.
- The convergence of prediction markets and leveraged trading could change how Americans trade on real-world events.
- This move brings prediction markets into competition with platforms like Robinhood and Coinbase.
- Analysts consider this a natural product extension for prediction markets and a defensive move against future competition.
- Robinhood's Prediction Markets hub, a partnership with Kalshi, was its fastest-growing product line by revenue.
- The CFTC is working to 'onshore' perpetual derivatives, aiming to create a pathway for these markets within the U.S. under appropriate safeguards.
- Prediction markets face increased scrutiny due to alleged insider trading and data manipulation incidents.