Prediction Market Volume Hits Record $701.7 Million Despite Regulatory Pushback

Prediction markets continue to grow in popularity, seemingly without restraint. They reached their highest single-day trading volume on record this week, totaling $701.7 million despite continued regulatory pressure from state authorities.

Kalshi led the activity with $465.9 million in volume, representing nearly two-thirds of the total volume across prediction market apps. Gate Research data from Dune Analytics show that Polymarket and Opinion combined for approximately $100 million in additional trades. The figures surpassed a previous high of $666.6 million established one day earlier.

The January surge follows a year of significant growth for Kalshi, as it processed a total volume of $23.8 billion in 2025. That’s up over 1,100% from the previous year. Kalshi processed 97 million transactions last year, representing an increase of more than 1,680% from 2024.

December saw the most activity in 2025, bringing in $6.38 billion in volume, primarily driven by sports betting contracts that increased usage on the platforms. More traditional cryptocurrency exchanges, such as Coinbase and Gemini, have begun integrating prediction markets into their platforms, along with self-custody wallets, like MetaMask, which have also started incorporating similar markets.

Although the industry has attracted valuations in the multi-billion-dollar range on Wall Street, recent studies of blockchain transactions have revealed that the prediction market industry has a trader loss rate of around 70%, which is comparable to the average trader loss rate for contracts for difference.

Regulatory scrutiny remains a factor as Google recently permitted advertisements for prediction markets while maintaining a ban on binary options.

Traders hedge geopolitical risks

Traders have increased their wagers on international developments following the Trump administration's intervention in Venezuela. Activity on prediction platforms suggests a shift in focus toward future military and diplomatic actions. Piper Sandler analyst Andy Laperriere noted to clients on Monday that the administration appears increasingly comfortable with the use of military force as it enters the second year of its current term.

On the Kalshi market, the probability of the US reclaiming the Panama Canal before 2029 increased to 35% last week, up from 30% the week prior. President Trump previously stated he would consider using force to gain control of the maritime route. Similarly, the likelihood of the US taking control of any part of Greenland reached 38% last Tuesday, an 8 percentage-point increase from the week before. 

A separate contract regarding a potential purchase of the Danish territory was hovering near a 25% chance, up from 20%. Combined wagering on these Greenland-related questions on Kalshi has reached nearly $2.5 million. While Greenlandic leaders have rejected the possibility of a takeover, the president reiterated his interest in the territory during a recently published interview.