US-based Kalshi dives into crypto prediction markets

Clients can now wager on scenarios such as Bitcoin reaching $100,000

Kalshi, a regulated prediction market platform in the United States, is expanding its offerings to include bets on cryptocurrency price outcomes, marking a significant move into the crypto space.

The New York-based company will allow clients to wager on various scenarios, such as when Bitcoin will reach $100,000 and the highest price Ethereum will achieve in 2024.

These bets, however, will not be in cryptocurrency but in US dollars, aligning with the platform's existing market settlement process.

This expansion comes at a time when digital assets are experiencing a resurgence in popularity, with the CoinDesk 20 Index showing a nearly 50% increase in value since the beginning of the year.

Prediction markets, traditionally seen as a niche activity, are also gaining renewed interest from investors. Bitwise Investments researchers predict that more than $100 million will be staked in prediction markets in 2024, suggesting a potential breakout year for the industry.

Even former US President Donald Trump has been engaging with crypto-based prediction markets, indicating growing mainstream attention.

Advocates argue that prediction markets serve a broader purpose beyond mere gambling. By incentivizing participants to back their beliefs with money, these markets provide insights into public sentiment that can often differ from conventional polls and expert opinions.

Kalshi's move into crypto follows a similar path taken by its competitor, Polymarket, which offers numerous markets on crypto-related outcomes. However, unlike Polymarket, which is restricted from operating in the US due to a settlement with the Commodity Futures Trading Commission (CFTC), Kalshi is licensed by the regulatory body, giving it an advantage in attracting US-based traders.

Nevertheless, Kalshi faces its own regulatory challenges, including a legal battle with the CFTC over its listing of markets related to US political outcomes. The agency, led by chairman Rostin Benham, has signaled its intention to propose new regulations for prediction markets in the coming months, suggesting potential changes on the horizon for the industry.

These Kalshi developments occurred against the backdrop of a broader upswing in the crypto landscape. Bitcoin surged to a new record high of over $72,000 on March 11, surpassing its previous peak set just days prior.

The uptick follows increased institutional interest and the approval of spot BTC exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). Despite recent volatility, industry experts anticipate further gains and speculate on the potential for broader cryptocurrency adoption driven by the growing popularity of ETFs.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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