Polymarket Falls Behind Kalshi in Prediction Market Race After Operational Stumbles

Bloomberg reports that Polymarket has lost its prediction market trading volume lead to Kalshi amid a botched fee rollout, a lengthy exchange outage, and growing impatience from backer Intercontinental Exchange.

Polymarket, once the undisputed leader in prediction market trading volume, has ceded that position to rival Kalshi amid a growing list of operational missteps that have slowed its push into the US market, according to a Bloomberg report.

Year-to-date notional volume has tilted in Kalshi’s favor, at $37.5 billion versus Polymarket’s $29.2 billion. The shift in the competitive landscape is most visible in valuations: Kalshi raised $1 billion at a $22 billion valuation led by Coatue Management last month, while Polymarket is reportedly only in talks to raise at a $15 billion valuation, a gap of roughly $7 billion.

This story is an excerpt from the Unchained Daily newsletter.

The divergence reflects Polymarket’s difficulty navigating an engineering and regulatory constraint its US-first competitors did not face: its international exchange runs on crypto rails, creating complexity that has slowed its US product rollout.

Polymarket’s plan had been to reach product parity with Kalshi by the Super Bowl, Bloomberg reported. However, the company missed the deadline.

Subsequent stumbles have reinforced the perception of a company struggling to execute. A recent fee rollout was sufficiently botched that an employee admitted on the platform’s Discord server that “the rollout was terrible.” A scheduled five-minute exchange restart last Monday turned into an outage exceeding an hour. A Washington pop-up bar also drew negative coverage for technical problems during its opening.

Intercontinental Exchange, parent of the New York Stock Exchange and Polymarket’s biggest institutional backer with a commitment of up to $2 billion at escalating valuations, has at times grown impatient, Bloomberg reported, citing people familiar with the situation. ICE CEO Jeff Sprecher, who has called Polymarket CEO Shayne Coplan a “genius,” has urged him to move faster.

“You’re not going to be a prime time company unless you can access the US legally,” Sprecher is quoted as telling Coplan.