Kalshi is in talks to raise new capital at a $40 billion valuation, nearly doubling the $22 billion valuation it achieved in May when it closed a $1 billion Series F led by Coatue Management, with participation from Andreessen Horowitz, Sequoia Capital, Morgan Stanley and Ark Invest, according to the Financial Times citing people familiar with the matter. The company could close the new funding round as soon as the third quarter of this year. If completed at the reported valuation, Kalshi's value would have increased eightfold in less than a year, from $5 billion in October to $40 billion by Q3 2026. The valuation would also far surpass Polymarket's last reported valuation of $15 billion in April.

This matters because it suggests prediction markets have moved from niche trading venue to institutional allocation target. Kalshi's valuation trajectory reflects a structural shift in investor conviction — capital inflows from names like Morgan Stanley and Ark Invest. The platform's monthly notional trading volume reached $17.9 billion as of May, compared with Polymarket's $7.1 billion, according to Token Terminal. Kalshi's partnership with Robinhood to offer NFL and college football prediction markets drove the volume flip around September last year, and the gap has widened since. The success has reportedly drawn Meta into the space, with CEO Mark Zuckerberg directing staff to create a prediction markets mobile app called Arena to challenge Kalshi and Polymarket, per the New York Times. Cboe Global Markets launched its own platform, Cboe Predicts, on Tuesday with binary contracts tied to the S&P 500.

For traders, this is a sector rotation signal — institutional capital is flowing into regulated prediction markets infrastructure. Kalshi's valuation run suggests investors see regulated platforms as the durable model, particularly as legal challenges mount. Kentucky sued five prediction market platforms last week, including Kalshi and Polymarket, accusing them of operating unlicensed sports betting platforms. The US Commodity Futures Trading Commission has sued multiple state authorities to block their attempts to police prediction markets, claiming exclusive jurisdiction. The regulatory battle lines are drawn, and the capital is flowing to the platform with CFTC registration. This does not translate directly to a crypto trade — Kalshi has no token and Polymarket's infrastructure is not widely exposed in liquid DeFi protocols — but it clarifies where institution-grade capital goes when it picks prediction markets. Projects positioning as regulated infrastructure have the wind at their backs; those relying on offshore structures face headwinds.

Watch whether Kalshi closes at the reported $40 billion valuation or higher — if the round attracts participation from additional traditional finance names, it would confirm prediction markets are being treated as a new asset class by allocators with multi-decade time horizons.

Source: CoinTelegraph