Author: Nancy, PANews
Leading players in the prediction market are extending their battle to the larger derivatives arena.
On April 22, Polymarket and Kalshi announced major news almost simultaneously: both prediction market giants plan to enter the perpetual contract field, with products covering crypto, US stocks, and commodities.
Polymarket takes the lead in shifting to perpetual contracts.
On April 14th, Kalshi first signaled that a new product would be released on April 27th. The teaser video showed a green spiral forming a perpetual ring, eventually revealing the word "Timeless." At the time, the community speculated that this update might introduce a perpetual prediction market with no expiration date.
On April 22, The Information exclusively revealed that Kalshi plans to launch perpetual futures products, initially starting with crypto-linked perpetual contracts, and may expand the model to commodities and other asset classes in the future. Initially, the US dollar will be used as collateral, with stablecoin support to be introduced later.
But almost simultaneously, Polymarket preemptively pressed the launch button. On April 22, Polymarket also directly announced the launch of perpetual futures linked to cryptocurrencies, US stocks, and commodities, stating that registration would grant early access.
It's hard to call this timing a coincidence. As their most direct competitors, Polymarket clearly intended to seize market narrative and user attention before the official launch of Kalshi's product, attempting to establish a first-mover advantage.
Although both parties hold CFTC-approved contract marketplace (DCM) licenses, their respective paths differ significantly.
Polymarket's core user base consists of crypto-native traders who are already very familiar with the mechanisms of perpetual contracts, making the migration process relatively inexpensive. Furthermore, since Polymarket's main business still operates offshore, its product design and launch schedule will be more flexible, allowing for rapid coverage of various asset classes and serving global users.
However, Polymarket's compliance business in the United States is still in its early stages, and there is still a high degree of uncertainty in terms of regulatory adaptation and user experience.
In contrast, Kalshi, a platform that started with compliance, not only holds a DCM license but has also recently been approved to offer margin trading, thus meeting the requirements for formally entering the derivatives market. This allows Kalshi to legally provide related services in the United States, making it easier to attract institutional funds, compliant retail investors, and users with lower risk tolerance. Especially during the window of opportunity when US regulators are gradually becoming more lenient towards perpetual contracts, this compliance advantage could become a competitive weapon for Kalshi.
However, Kalshi's reliance on the US domestic market will also limit its expansion speed to some extent.
After achieving valuations of tens of billions, why are these two giants collectively embracing derivatives?
The fact that the two leading players in the prediction market have simultaneously shifted their focus to perpetual contracts may not be a coincidence.
First, there's the pressure of valuation and growth. Standing at the threshold of a $10 billion valuation, both Polymarket and Kalshi need stronger revenue capabilities to support ever-increasing market expectations.
In just one year, Polymarket's valuation jumped from $1 billion to $15 billion, a surge of about 15 times; Kalshi's valuation more than doubled from about $1.1 billion to $22 billion during the same period, an increase of nearly 20 times.
Behind the soaring value is the repricing by capital towards the explosive expansion of trading volume in the prediction market, the narrative of the sector, and its future growth potential. Dune data shows that the monthly nominal trading volume in April 2026 reached $16.96 billion, an increase of more than 9.3 times compared to the same period in 2025 ($1.82 billion).
However, the valuations of these high-growth companies are often based on forward-looking pricing, reflecting optimistic expectations of continued high growth. If actual revenue and profitability cannot keep pace with the expansion of trading volume, the valuation faces a significant risk of correction. Investors, in addition to looking at the current size, place greater emphasis on the sustainability of the business model and its counter-cyclical capabilities.
Currently, the core liquidity of the prediction market remains highly dependent on the sports sector. Dune data shows that as of April 22, the sports sector accounted for 73.7% of weekly trading volume, far exceeding other categories such as cryptocurrency, politics, and entertainment. This structural dependence on a single sector makes platform revenue susceptible to seasonal fluctuations in sporting events and the cyclical nature of major events.
However, the growth of prediction markets that rely solely on event-driven factors has a clear ceiling. Revenue forecasting is difficult and highly volatile, making it hard to support sustained high valuation expectations. Polymarket, for example, recently adjusted its fee model to monetize revenue. Perpetual contracts, on the other hand, have a larger market potential. Expanding into this market is expected to bring Polymarket and Kalshi higher trading volumes, greater user stickiness, and more stable fee revenue, thereby diversifying their businesses and further strengthening their valuations.
Second, there is a shift in regulatory direction. The change in the attitude of US regulators towards perpetual contracts has provided an important regulatory window for platforms such as Kalshi and Polymarket to launch Perps.
Just recently, CFTC Chairman Michael Selig stated that bringing genuine cryptocurrency perpetual contracts back to the United States is a core component of the CFTC's innovation policy agenda. He pointed out that due to regulatory lag, a large amount of related liquidity has flowed overseas in the past, and the CFTC is accelerating the development of a framework to provide a clear path for genuine perpetual futures within weeks, in order to reshape the United States' competitiveness in the derivatives market.
In contrast, prediction markets still face regulatory uncertainty. Just recently, New York State sued Coinbase and Gemini, accusing them of operating illegal prediction markets.
According to Bloomberg, the forecasting market is ramping up its lobbying efforts in Washington to cope with increasing regulatory pressure. Firms like Kalshi are hiring lobbying teams to fend off potential congressional crackdowns on the industry. Lobbying spending in the first quarter of 2026 is projected to reach at least $1.84 million, a record high and up over 60% year-over-year. Kalshi has already registered two new lobbying firms and hired former Obama advisor Stephanie Cutter to expand its influence within the Democratic Party.
Third, the competitive landscape is rapidly intensifying. As prediction markets gain popularity, more potential competitors are accelerating their entry, including traditional companies like JPMorgan Chase, Charles Schwab, and Citadel Securities, as well as crypto institutions such as Binance, OKX, Hyperliquid, Paradigm, and Coinbase, all of which have already established or plan to establish related businesses. Faced with this crowded market, Kalshi and Polymarket are forced to step out of their comfort zones and seek new growth drivers.
In addition, there's the conversion of existing user traffic. Besides sports, crypto is one of the fastest-growing categories in the prediction market, and existing crypto user traffic can be readily converted to the derivatives market. Dune data shows that as of April 22nd, crypto's weekly notional trading volume on Kalshi accounted for 10.8%, while Polymarket's reached 21.8%, both second only to the sports sector.
However, whether these two newcomers to the derivatives industry can develop perpetual contracts into a sustainable growth engine remains to be seen.
