Wall Street Is Already Betting on Prediction Markets
When Troy Dixon first suggested incorporating predictive markets into the electronic trading platform he works on, he was met with disbelief. “People were telling us we were crazy,” Dixon, Tradeweb’s co-head of global markets, told WIRED. But after the company announced its partnership with Kalshi in February, Dixon says, the mood changed dramatically. “We were inundated with calls,” he said. “We’ve never had this kind of feedback from customers on any other listing.”
Tradeweb, majority owned by the London Stock Exchange Group, serves the traditional financial world, including institutional investors such as pension and mutual funds, banks, hedge funds and insurance companies. While most of the public debate about prediction markets focuses on their sports offerings (a fierce legal war is underway over whether they are actually sports betting companies), the platforms are also becoming popular among professional traders. Savvy investors are interested in it largely because of markets on topics like election results, the Iran war and the price of Bitcoin. Many view prediction markets as forecasting tools that can be used to inform trading decisions. “We’re super excited,” Dixon says. “It’s very rare to have something so new and cutting-edge.”
Kalshi, one of the two largest players in the sector, wants to establish closer ties with the world of finance. The company is already seeing billions of dollars in trading volume generated by institutional investors in the markets in its climate/weather and science/technology categories, according to spokeswoman Elisabeth Diana. This week, Kalshi announced its partnership with XP International, a Brazilian financial services company. The agreement allows Brazilian clients to trade on Kalshi’s financial and political forecast markets through XP. In a statement, Lucas Rabechini, XP Inc.’s director of financial products, called predictive market contracts a “new asset class.”
Prediction markets are currently regulated in the United States by the Commodity Futures Trading Commission, the federal agency that oversees derivatives markets. Although there is growing bipartisan pressure to classify prediction market events as gambling, the CFTC maintains that these platforms do indeed offer financial products.
For Kalshi, getting closer to Wall Street may be a wise strategy. The company is facing a wave of lawsuits over its sports markets. Anything that highlights its usefulness in the world of finance will help the company make its case that it is not a hub for investing in sports, but rather a a hub for the future of finance. And while the vast majority of activity on its platform still comes from ordinary people (known in industry jargon as retail traders or click traders) trying to predict the outcome of soccer matches and other sporting competitions, professional traders are also increasingly present.
Some of the biggest names in finance have already launched into the world of predictive markets. In October 2025, Intercontinental Exchange, the parent company of the New York Stock Exchange, invested $2 billion in Polymarket, Kalshi’s largest competitor. Jump Trading, a high-frequency trading company, has taken a stake in Kalshi and Polymarket in exchange for providing market-making services to the companies. (Market makers buy and sell contracts immediately and are necessary for derivatives markets to operate.) Susquehanna International Group, one of the world’s largest market makers, is currently Kalshi’s primary market maker. SIG also plans to launch its own prediction market offering in collaboration with fintech company Robinhood and is recruiting staff specifically to trade on prediction markets. A number of leading brokerages serving blue-chip banking clients, such as Clear Street and Marex, also plan to soon provide their clients with access to prediction markets.
