Event-Driven Trading and Prediction Markets have gained significant traction in the digital finance world. In October 2025, two major competitors in this sector, Polymarket and Kalshi, reached significant milestones.
The decentralized platform Polymarket set a new record for the number of Monthly Active Traders. However, the U.S.-regulated firm Kalshi has maintained overall market dominance through its deep Trading Volume.
Polymarket’s Rapid Ascent
New Record in Activity
According to data from The Block, Polymarket’s count of monthly active traders reached a new peak of 477,850 in October. This surpassed the previous record set in January (462,600). This represents a strong rebound of 93.7% compared to the 246,610 users recorded in September.
- Trading Volume: Polymarket’s monthly trading volume reached a new high between $2.59 billion and $3 billion last month. This reversed a trend where volumes had been below $1 billion from February to August.
- Reason: October reports confirmed that the surge in activity was driven by traders utilizing strategies such as Arbitrage and Liquidity Providing.
Airdrop and Social Media Trends
The primary driver behind Polymarket’s surge in activity is its impending POLY token launch and Airdrop program.
- CMO Confirmation: Polymarket’s Chief Marketing Officer, Matty Modafar, confirmed in an interview on October 24th that the POLY token would be released, along with an airdrop.
- Twitter Impact: While the anticipation for the airdrop is real within the crypto community, hashtags like #Polymarket Airdrop were not heavily trending. Nevertheless, users are actively engaging in ‘Farming’ activities to build eligibility for token rewards. Social warnings about scams continue to be issued.
Kalshi’s Volume Dominance
Although Polymarket reached a new peak in user numbers, Kalshi, which is regulated in the United States, continues to dominate in financial strength and institutional investment.
1. Volume Lead
The U.S.-regulated Kalshi surpassed Polymarket in October with a monthly volume of $4.4 billion. According to Dune Analytics data, Kalshi held a market share of 60% to 65% during September and October.
- Trading Characteristics: Kalshi has a low Open Interest-to-Volume ratio, indicating that traders quickly close their positions and re-trade. This confirms that Faster Trading is prevalent on Kalshi.
2. Rapid Institutional Valuation
- Recent Funding: Kalshi secured $300 million in funding on October 10th, at a valuation of $5 billion, led by prominent venture capitalists like Sequoia and Andreessen.
- New Valuation: A Bloomberg report on October 22nd indicated that Kalshi is considering new investment proposals at a valuation ranging from $10 billion to $12 billion.
- Partnerships: Kalshi continues to work with the NHL (National Hockey League) on sports betting markets and with Robinhood to expand its investment platform.
Regulatory Environment and U.S. Re-Entry
The competition between these two companies is intensifying as the regulatory environment for prediction markets begins to ease.
Polymarket’s U.S. Entry (Confirmed)
- Re-Launch: Polymarket is preparing to re-launch operations in the United States by the end of November. The company plans to execute its operations in a CFTC (Commodity Futures Trading Commission) compliant environment, following its acquisition of the firm QCX in July 2025. This re-entry may initially focus on sports betting.
- Legal Context: This is a major victory for Polymarket, which was forced to exit the U.S. in 2022 following a $1.4 million fine.
Regulatory Outlook
The CFTC has generally softened its regulatory perspective on prediction markets since the 2022 lawsuit. This is a strong indication that crypto-integrated prediction markets are viewed as platforms for financial innovation. The overall prediction market sector’s trading volume exceeding $7 billion in October is attributed to the sector’s growth and increased legal clarity.
Conclusion
The prediction market sector is currently on a growth trajectory with a total volume exceeding $7 billion. Polymarket’s airdrop and U.S. re-entry are expected to further expand its user base. Meanwhile, Kalshi’s deep funding and regulatory control will help maintain its volume dominance. The competition between these two entities is set to intensify in the coming months.
