Prediction Markets Cross $6.5B in a Record Week – But Scrutiny Is Catching Up
Prediction markets reported their strongest week, with Kalshi hitting a notional volume of $3.54 billion while Polymarket recorded $2.48 billion; the industry’s combined notional volume crossed $6.5 billion setting a new overall high, according to DeFi Rate.
Image source: DeFi Rate
This surge coincides with a positive outlook on the industry by Bank of America Analysts who expect sports-related events contracts to hit $1.1 trillion per year. Bernstein also estimates that total market volumes will reach $240 billion in 2026, with further projections pointing to a $1 trillion market by 2030.
Kalshi’s Regulatory Edge Continues to Drive U.S. Market Dominance
The BoFA report also revealed that Kalshi enjoys 90% of the prediction market share in the US; one of the most obvious reasons for this dominance is the company’s regulatory standing with the CFTC. Kalshi is federally regulated to offer sports events contracts across all 50 states; in comparison, only 38 states recognize sports betting legally.
It is also intriguing to observe that sports also make up over 79% of the market share; this was evident this week with the Masters Tournament attracting $460.3 million in notional volume.
Fast Crypto Contracts Are Reshaping Polymarket’s Market Structure
Dune’s recently published on-chain deep dive on Polymarket’s fastest crypto markets noted a steady growth pattern since the platform launched its 15-min contracts in September 2025.
Here are a few stats that highlight the growth:
- 15-minute markets reached $292 million in weekly notional volume by February 2026
- Following the launch of 5-minute contracts, the product scaled rapidly to $385 million in weekly volume by the week of March 2
- Over the period from February 15 to March 30, 5-minute markets generated $2.3 billion in notional volume, nearly 3x the $795 million recorded by 15-minute markets despite being live for only 8 weeks
- Fast markets now account for over 80% of Polymarket’s crypto-only trading volume, up from roughly 40% in September 2025
Bitcoin continues to attract the most activity, accounting for approximately 77% of weekly fast-market turnover, with Ethereum contributing around 13%, while newer assets such as Solana and XRP continue to expand their share.
Image source: Dune
The rise of shorter-duration contracts points to an important structural evolution in prediction markets: the compression of time. Rather than simply expanding across new event categories, users are increasingly engaging through higher-frequency trading formats that resemble ultra-short-dated derivatives products.
More notably, Dune’s analysis confirms that faster markets are increasingly automated. In 5-minute and 15-minute contracts, bot and highly active automated addresses now control 55% to 62% of notional volume, compared to just 31% in longer-duration contracts.
Regulatory Scrutiny Shifts Toward Market Integrity
At the same time, regulatory developments continued to take shape this week, with scrutiny now shifting towards market integrity, insider access and the ethics of events-based contracts.
The most notable flashpoint was Polymarket’s $170 million in volume which flowed through Iran ceasefire-related contracts. Bloomberg reported that the scale and timing of certain positions have triggered renewed concerns around potential insider trading and information asymmetry in event contracts linked to military and diplomatic developments.
Separately, reports indicate that U.S. officials have issued internal warnings to White House staff against trading on prediction markets where access to privileged policy or security information could create an unfair advantage.
At the platform level, Robinhood is taking a cautious approach on markets that could be subject to insider trading or manipulation. The company’s UK president Jordan Sinclair specifically outlined that the platform does not currently feature mention markets and there are no plans to include them in the pipeline.
Meanwhile, Kalshi has found some reprieve after a judge in Arizona halted its criminally leveled charges in an ongoing Federal vs State tiff.
