Individual traders drove Kalshi’s rise. Now, it’s going for Wall Street

Prediction market platform Kalshi processed more than $17 billion in various trading contracts in May, a record amount up more than 2500% from a year ago.

But while individuals drove Kalshi's astronomical growth over the past year, the company has focused on a new push in 2026: institutional adoption.

Less than a year after trading volumes started marching consistently higher in September, Kalshi — the largest prediction market platform in the U.S. — has made a series of moves in 2026 to increase its appeal to Wall Street. Those include rhetorical shifts, partnerships with brokerage platforms and teaming up with companies to develop necessary infrastructure.

And what's driving institutional interest? Hedging. Instead of having to game the financial market reactions to alleviate risks to different events, like an election or economic data report, a firm can place money on a binary contract related to that incident.

"Those are tradable assets now that people can directly trade upon, as opposed to trading on a derivative of those," said Andy Ross, head of institutional at Kalshi. "So you've got better hedging."

While retail's usage of the platform has led to sports-related event contracts to dominate trading volumes, sources told CNBC institutions are more interested in ones related to elections, weather incidents, macroeconomics and commodities.

In Kalshi's announcement of its $22 billion valuation on May 7, the company highlighted its institutional growth rather than its retail gains. Over the prior six months, institutional trading volumes were up more than 800%, the company said. However, Kalshi has yet to reveal what the dollar volumes are for the subgroup of traders, making it unclear how much that surge represents.

The outlook for institutional adoption is what's driving bullishness on the industry, according to Pierre Lindh. The founder of Next.io, an in-person and online events company focused on the gaming and now also prediction market industries, he said the expectation institutions will start trading on these markets en masse is behind the rising valuations of the private companies.