Prediction Markets Next Major Bet: Wall St. Traders

Most people use prediction markets like Kalshi for the kinds of wagers that have made the companies famous: speculating on political races, N.B.A.finals games, Taylor Swift’s marriage plans.But businesses, including major Wall Street firms, are betting that prediction markets can be used for so much more.Small businesses, including a New York City beer bar and a specialist sports insurer, have already used Kalshi for hedging their business risks.

But the platform has spent months hiring trading specialists and working with financial firms to lay the groundwork for institutions to do that, too.The stakes are high.Kalshi has already become the biggest prediction market in the United States, processing $17.9 billion in trading volume last month, largely from individual bettors.

And it raised $1 billion last month at a staggering $22 billion valuation — double its appraised amount in December — on the promise that it could supercharge its growth by drawing in hedge funds, brokerages and more.Polymarket, its chief rival, sold a stake to the parent company of the New York Stock Exchange with a similar aim.“I think there’s a new Wall Street being formed,” Tarek Mansour, a founder and the chief executive of Kalshi, said in a recent interview.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....