Jump Trading has officially joined Kalshi, starting market-making operations on the event betting platform. The large proprietary trading firm is a pioneer in tapping into the new market, which is seen as a cross between Wall Street finance and Silicon Valley technology. Their operations will help increase liquidity for Kalshi.
The Chicago-based trading firm has begun providing liquidity for event contracts on Kalshi, allowing users to bet flexibly on a wide range of events including political events such as elections and sports results, Bloomberg reported, a significant expansion in the sector, the people said.
Jump Trading’s move comes as the prediction market hits record growth, with combined trading volumes on Kalshi and Polymarket hitting $7.4 billion in October. Sports contracts, in particular, have become the leading category on Kalshi, contributing $1.1 billion in trading volume in the last week of October alone, underscoring the strong interest.
Major Wall Street players consider entering event-prediction markets
Jump Trading’s entry into Kalshi is part of a broader trend of major financial firms looking into the events market. AQR Capital Management’s Cliff Asness has already revealed his intention to expand into sports betting. Furthermore, Susquehanna International Group (SIG) has been a pioneer in providing liquidity to Kalshi. This convergence suggests that the events market is rapidly gaining acceptance on Wall Street.
The new trading activity signals a major turning point for prediction markets, which have historically been small in volume. The boom was fueled by Kalshi’s successful funding round, which raised $1 billion and valued the company at $11 billion. In just one month, the company’s value doubled, with backing from big names like Sequoia Capital, CapitalG, and Andreessen Horowitz. Kalshi now challenges Polymarket’s estimated $12-15 billion valuation.
Jump Trading had experience with sports betting before joining Kalshi, running a London-based trading group on Betfair before winding down in 2023. In parallel, Jump Capital, its investment fund, backed Sporttrade, a regulated prediction market. The combination of live trading experience and investment backing shows that Jump has studied the events market closely.
Crypto exchange launches new platform integrated with Kalshi
Coinbase is developing a new prediction market platform using Kalshi’s regulated infrastructure, according to Jane Manchun Wong. The screenshot shows the complete interface bearing the Coinbase logo. The platform will be operated through Coinbase Financial Markets, the exchange’s derivatives division. This potential partnership signals a major bridge between the cryptocurrency market and traditional prediction markets.
Coinbase CEO Max Branzburg has confirmed the company is building an “exchange for everything,” including tokenized stocks and prediction markets. This potential prediction platform would allow users to deposit USDC to bet on a range of outcomes, from politics and sports to economics and technology.
Retail brokers witness rapid growth
Robinhood saw 2.3 billion event contracts traded between July and September, with October volume reaching 2.5 billion. Robinhood said its prediction markets and Bitstamp deal alone generate an estimated $100 million in annual revenue, underscoring the financial potential of these expansions.
Robinhood reported total revenue of $1.27 billion in the third quarter, a sharp 129% increase year over year, far exceeding analysts’ expectations. CFO Jason Warnick said October saw record monthly trading volumes across all of the company’s markets. This growth included stocks, options, futures, and especially prediction markets.
Kalshi expands market with StockX-linked event contracts
Kalshi and StockX have announced a partnership that will create a new category of event contracts based on the resale prices of high-demand sneakers and collectibles. The partnership will allow Kalshi users to bet on specific predictions, such as whether sneaker releases will reach a set resale price threshold. They will also be able to predict which brands will dominate sales on StockX during major shopping events, marking a foray into the non-traditional prediction market.
StockX provides anonymized and aggregated market data, allowing Kalshi to create new prediction contracts. These contracts focus on high-value items, including holiday sneakers, Supreme apparel, Pokémon cards, and Pop Mart Labubu figurines. The combination of retail data and prediction markets creates unique trading opportunities for users.
Kalshi CEO Tarek Mansour said the partnership with StockX was a natural fit. He explained that sneakers, apparel, and collectibles are “signature cultural moments” with clear, measurable outcomes, which is what Kalshi’s events are all about. The partnership expands the definition of “event” in terms of exclusive deals.
Questions over regulations continue to spark debate
To avoid state gambling laws, prediction platforms have evolved by classifying bets as regulated financial contracts. However, this strategy is being challenged in lawsuits from gambling regulators and Native Americans. Despite this strategy of circumvention, the market still faces serious legal confrontation over the true nature of the contracts.
The Commodity Futures Trading Commission (CFTC), the regulator, has not yet intervened to stop trading in prediction markets. Kalshi operates under the CFTC, while Polymarket has faced more scrutiny due to its decentralized structure. Polymarket has even been blocked in Romania due to concerns about illegal gambling, highlighting the differences in international regulatory barriers.
Scaling prediction markets depends on strong liquidity, which can only be achieved when there are parties willing to take both buy and sell trades. This is a key role that professional trading firms like Jump Trading and Susquehanna regularly play in traditional markets.
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