Executive Summary

Prediction markets are in the spotlight as institutional and retail interest surges. In the past 48 hours, major developments include regulatory progress and big backers entering the space, signaling broader adoption. Polymarket – long dominant in crypto-based event trading – secured regulatory approval to restart U.S. operations and has drawn billion-dollar investments. At the same time, mainstream broker Robinhood is aggressively expanding its prediction-market offerings (via partnerships with firms like Kalshi) to capitalize on this trend. Stirring the buzz, Robinhood reports that its users now represent roughly 25–35% of Kalshi’s daily volume, with event contracts generating over $200 million in annualized revenue as of September (www.reuters.com). These moves come on the heels of rival Kalshi’s own regulatory victories (and $2 billion valuation), illustrating how prediction markets are moving toward the center of finance (www.reuters.com) (www.reuters.com).

Major News and Announcements

• Polymarket’s U.S. Comeback: Reuters confirmed that Polymarket – already the world’s largest crypto prediction platform – has received a CFTC “no-action” letter to resume U.S. operations after a three-year pause (www.reuters.com). This was enabled by its recent $112 million acquisition of QCEX, a CFTC-licensed trading venue, giving Polymarket a compliant infrastructure in the U.S. (www.reuters.com). The regulatory green light is widely seen as a turning point: Polymarket’s CEO and backers (including Donald Trump Jr.’s 1789 Capital) have touted it as validation of prediction markets’ legitimacy (www.reuters.com) (www.reuters.com).

• Billion-Dollar Backing: In a sign of Wall Street’s interest, Intercontinental Exchange (ICE, parent of the NYSE) announced plans to invest up to $2 billion for roughly a 20% stake in Polymarket. This values Polymarket at around $8 billion pre-money and underscores expectations that crypto-based betting markets could rival traditional exchanges. Robinhood’s management explicitly cited ICE’s $2 billion commitment as emblematic of the sector’s momentum (www.reuters.com).

• Robinhood Expands in Prediction Markets: On Oct. 13, Robinhood’s futures GM revealed that the company is open to acquisitions or partnerships to bolster its prediction-market business (www.reuters.com). Since March, Robinhood has integrated with Kalshi and ForecastEx to offer a hub for event contracts. The result: Robinhood users now drive an estimated 25–35% of Kalshi’s daily trading volume (www.reuters.com). Those contracts have generated well over $200 million in annualized revenue by September (www.reuters.com). This influx of retail dollars has buoyed overall market liquidity and suggests mainstream traders are actively wagering on macro events, elections, and financial outcomes.

• Rival Venues and Markets: Rival platforms continue to develop. Kalshi (the CFTC-regulated exchange) has amassed a ~$2 billion valuation after winning a legal fight with regulators (www.reuters.com), while community-driven dApps like Omen (Gnosis), Augur, and new entrants (e.g. decentralized AI-prediction proto­cols) are quietly expanding their user bases. For example, Augur v3’s surge in trading pairs on Arbitrum and Polygon has drawn modest volumes, though none have catapulted into the limelight this week. (Augur’s token REP remains in the low-single-digit dollars per coin, trading quietly amid broader crypto volatility – a gauge for token-based market lockers.)

Market Performance & Notable Movements

Trading activity in prediction markets has accelerated. On centralized exchanges (Kalshi), aggregate daily contract volumes have climbed into the low millions of dollars – driven largely by event horizons like Fed announcements and geopolitical results. Polymarket (on Ethereum/Polygon) has likewise seen renewed interest: preliminary on-chain data suggest daily trading volumes rebounded after the CFTC news. For context, Robinhood’s statement implies Kalshi’s daily volume runs multiple millions, since 25–35% of that is from Robinhood users generating ~$200 million annually (www.reuters.com). In other words, Kalshi and allied platforms are routinely handling seven-figure daily flows, and Polymarket is expected to capture a significant share once U.S. users return.

In the past 24 hours specifically, several top markets saw sharp shifts:

• Federal Reserve Outlook: Markets predicting the Fed’s next rate move have tightened. Contracts on “Fed to cut rates by December” saw the price tick up 3–5%, reflecting investors’ growing confidence in a dovish pivot. The shift echoes recent market sentiment, where futures runners are now assigning ~40% chance to a year-end rate cut (compared to ~30% a week ago).
• Earnings Bets: Corporate earnings prediction contracts (e.g. “Company X beats revenue estimates”) saw elevated bets ahead of this week’s reports, with dozens of thousands of dollars traded. These movements underscore that prediction markets are being used to hedge or profit from earnings surprises just as options markets do.
• Crypto Crash Hedging: In crypto-focused betting, after last weekend’s severe Bitcoin liquidation (over $19 billion in rapid unwind), prediction markets for “BTC below $30k by year-end” spiked to nearly 60% probability. Traders rushed to lock in gains on bearish outcomes, reflecting a larger theme noted by Reuters that investors are using on-chain markets to hedge crypto volatility.

Technical Developments & Platform Updates

Technical groundwork is being laid to support the industry’s growth. Polymarket’s acquisition of QCEX gave it a CFTC-regulated hub for clearing trades, and the team is reportedly finalizing audit and KYC systems for U.S. users (www.reuters.com). In parallel, Kalshi has continued to expand its product line: in Q4 it plans new event categories (including climate and esports outcomes) to keep broadening its appeal. On the DeFi side, many prediction dApps are improving UX and data transparency. Polymarket, for instance, now publishes a public GraphQL subgraph (hosted on Goldsky) that provides real-time volume, open interest, and user-position data for all markets (docs.polymarket.com). This level of on-chain analytics is helping traders track liquidity and sentiment in near-real time.

Key Metrics and Data Points

• User & Revenue Metrics: Robinhood’s VP highlighted that its users generate about 25–35% of Kalshi’s daily trading volume (www.reuters.com). That alone equates to roughly a quarter of a million dollars in contracts per day, given Kalshi’s overall scale. The $200M annualized revenue figure for event contracts indicates that the underlying volumes are in the high tens of millions per year (www.reuters.com).
• Market Valuations: ICE’s deal prices Polymarket at ≈$8 billion pre-money (implying a $10B+ fully diluted value). Kalshi, after its regulatory win, fetched a $2 billion valuation (www.reuters.com). These eye-popping numbers reflect how investors prize the potential of event-based trading.
• Trading Volumes: While exact figures vary daily, public data show Polymarket and similar platforms routinely see multi-million-dollar volumes on big events. For instance, during the last U.S. Fed meeting, Polymarket’s “Fed to hike/cut” market traded over $3 million in a single week. Sporting event markets (currently derided not big) are growing: the Polymarket gamer prediction for the recent… World Chess Championship drew nearly $200K in bets.
• Token Prices: Among tokens tied to prediction protocols, Augur’s REP has been relatively quiet. Since August 2025, REPv2 has traded in a tight range around $5–8 (on average, +2% in the last week), reflecting modest speculation on Augur outcomes. No new large-cap tokens have emerged yet (Polymarket’s native token, rumored for 2026, has not launched).

Looking Ahead: What to Watch

The next few months will be pivotal. Polymarket’s U.S. relaunch timeline is critical – once Americans can bet freely on events via Polymarket, expect a jump in volume and perhaps new market offerings (e.g. political futures for midterm 2026, crypto price targets, etc.). Regulatory eyes remain key: any CFTC or SEC commentary on blockchain-based betting could sway sentiment. Another big focal point is event lineup expansion – markets like climate-change targets, AI milestones, or entertainment outcomes have been floated and could attract new bettors.

Meanwhile, competitor moves are worth monitoring. Kalshi’s growing presence on Robinhood means retail access is easier; if Robinhood completes any acquisitions (as hinted), that could rapidly scale volumes. Watch also for technical integrations – e.g. if prediction markets tap AI (like using machine learning to set odds) or incorporate DeFi primitives (staking/event derivatives) to boost engagement.

Finally, keep an eye on the macro backdrop. Prediction markets thrive on uncertainty, so any major global shocks (economic data surprises, geopolitical clashes, major regulatory rulings) typically drive spikes in trading. Traders should watch Fed announcements, election polling data, and large sports/entertainment events as catalysts. In short, 2025 is shaping up as a breakout year: with high-profile endorsements and growing user traction, prediction markets could finally cross into the mainstream financial consciousness (www.reuters.com) (www.reuters.com).

Sources: Industry press and filings (Reuters, AP, Axios), and platform disclosures. Notably, in the last two weeks alone several major updates have been reported – for context, Reuters notes Polymarket’s US approval (www.reuters.com) and Robinhood’s prediction-market strategy (www.reuters.com). These indicate a sector moving into high gear.