Prediction markets have moved from the edges of finance into mainstream attention, and no platform illustrates this shift more clearly than Kalshi. For many years, event-based speculation existed in legal grey zones or academic settings. That changed when Kalshi became the first company in the U.S. to secure approval as a Designated Contract Market for event contracts. Wealth management executives should understand how this platform works, why it matters and what its growth signals for client behavior.
Kalshi is built around a simple idea: Investors should be able to trade directly on the outcome of real-world events. Instead of attempting to express a view on inflation through a complex mix of bonds, options or macro ETFs, Kalshi allows an investor to answer straightforward questions, such as: Will the next CPI print come in above a certain number? Will Congress pass a particular bill? Will a specific candidate win an election?
The contract pays $1 if the outcome occurs and $0 if it does not. The price reflects the market implied probability of the event. It is intuitive and it feels familiar to younger investors who increasingly prefer direct exposure to the narratives that shape the world around them.
A Regulatory Milestone
The simplicity of the product does not mean the exchange is simple. Kalshi took a path that very few prediction platforms were willing to attempt. It approached the Commodity Futures Trading Commission (CFTC) and requested approval to operate as a regulated exchange. This required the platform to meet the same core principles that govern longstanding derivatives markets, including financial safeguarding, surveillance standards, trade reporting, rulebook compliance and protections designed to prevent manipulation.
After a detailed review, the CFTC granted approval. This decision established a new category of regulated exchange in the U.S., a category centered on event contracts.
A regulated exchange is treated differently.
This was a significant regulatory milestone. It showed that event-based speculation could operate within the same system that supervises futures, options and commodities. For the wealth management industry, that approval matters. A regulated exchange is treated differently than an offshore betting market or an informal website. It signals a level of legitimacy, oversight and permanence that advisors must account for when evaluating client behavior.
A Clean Way To Hedge
Kalshi did not appear overnight. The company was founded in 2018 by two MIT graduates: Tarek Mansour and Luana Lopes Lara. They recognized that investors lacked a clean way to hedge or speculate on real world uncertainties. They also recognized that regulators would never embrace prediction markets unless someone built an exchange from the ground up within the rules of the existing system. Their thesis proved correct. After securing regulatory approval, Kalshi launched to retail users in 2021 and moved quickly to expand its market offerings.
The history is important, but the growth is even more telling. Kalshi has experienced one of the fastest expansions in market breadth and user participation of any modern trading platform. According to Kalshi, its platform now offers more than 3,500 individual predictive markets. Only a short time ago, that number was 1,500, according to Legal Sports Report, which said Kalshi plans to surpass 4,500 markets by the end of this year. This rapid expansion reflects deliberate product development across economic indicators, elections, policy events, sports outcomes and cultural events.
Kalshi’s user base expanded 50 times year over year.
Growth in participation has followed the same trajectory. In an interview with CNBC on June 26, Mansour said the firm’s user base expanded 50 times year over year and its trading volume increased 100 times over the same period. According to analytics by Dune, Kalshi has publicly announced periods where it reached more than $500 million in weekly volume.
Dune also reported that the exchange captured more than 60% of global prediction market volume during several weeks in 2025. These numbers place Kalshi in a different category than hobbyist platforms or academic experiments. They signal that event contract trading has achieved real scale.
Real Implications
This growth carries real implications for wealth management firms. Younger investors are comfortable trading in environments that combine narratives, simplicity and rapid execution. Event contracts fit naturally into that pattern. For a growing number of clients, trading the probability of an event feels more direct than navigating ETFs and mutual funds.
Advisors need to understand this behavior because it affects liquidity, expectations, emotional decision-making and risk tolerance. If a client loses money speculating on a policy event, that loss affects their overall financial position even if it happens outside the advisory relationship.
The proliferation of markets on Kalshi also influences how investors form expectations. When thousands of event markets are available, clients begin to treat probabilities as signals. They watch the odds change in real time as news breaks. They compare their own views with the market’s implied view. This shapes their conversations with advisors. An advisor who does not understand event contracts will struggle to engage with a client who views these markets as a modern barometer of sentiment.
An advisor who does not understand event contracts will struggle to engage with a client who views these markets as a modern barometer of sentiment.
The scale of Kalshi does not mean firms need to offer access to event contracts. It does mean they must remain informed. Event contracts are not the same as futures or options, but they behave like structured, binary derivatives. They carry risk of total loss. They respond to headlines and political cycles. Wealth management executives must recognize that regulated event contract trading is not disappearing. It is growing, and it will continue to influence investor psychology.
Kalshi’s rise marks a turning point. Predictive markets have stepped out of the shadows and entered regulated finance. The CFTC’s approval of the exchange established a path for lawful operation. The platform’s growth shows that the market for event-based trading is real and expanding. For wealth management leaders, the responsibility is clear.
Understand the platform, understand the behavior it enables and integrate that awareness into how you assess client risk. The future of event contract trading is already here. Firms that ignore it will eventually feel the gaps in their understanding.
John O’Connell is Founder and CEO of The Oasis Group, a consultancy for the wealth management industry serving wealth management and technology firms.
