Major Trading Firms Rush Into Prediction Markets as Polymarket and Kalshi Volumes Surge

Prediction markets are attracting growing interest from some of the world’s largest quantitative trading firms, signaling that platforms such as Polymarket and Kalshi are increasingly being viewed as a serious financial market rather than a niche betting product.

Companies including DRW, Wintermute and IMC are building dedicated trading teams focused on prediction markets. However, their goal is not necessarily to predict election results, sports winners or political outcomes better than everyone else. Instead, they are looking to profit from pricing inefficiencies across different platforms.

Trading Strategies Focus on Market Inefficiencies

Many institutional firms are applying strategies already used in traditional finance and crypto markets, including arbitrage, market-making and high-speed trading. These firms monitor prices across multiple platforms and look for situations where the same event is valued differently.

A recent example involved the market for Britain’s next prime minister. Andy Burnham’s odds rose sharply on one platform while another market had already adjusted to a higher probability. Traders who spotted the gap early could potentially lock in profits before prices aligned.

Growing Volume Is Driving Interest

The rapid growth of prediction markets is a major reason behind the hiring wave. Polymarket alone processed between $22 billion and $40 billion in trading volume during 2025. Sports markets have become particularly active, with the UEFA Champions League Winner market generating $256 million in volume, the 2026 NBA Champion market reaching $399 million and the 2026 Stanley Cup market recording $79 million.

Combined, those three markets generated more than $730 million in trading activity.

Veteran Bettors Still Hold an Advantage

Despite the arrival of large institutions, experts argue that experienced sports betting groups remain the main force behind pricing accuracy. Many have spent decades developing advanced models to evaluate probabilities and identify value in betting markets.

Institutional firms are instead focusing on short-term price movements, liquidity differences and information delays between platforms.

Competition Expected to Intensify

The sector is expected to become even more competitive as new infrastructure launches. HyperLiquid is preparing to introduce prediction markets ahead of the 2026 FIFA World Cup, an event expected to generate significant trading activity across dozens of related markets.

As trading volumes continue to rise, prediction markets are evolving into a new battleground where traditional finance firms, crypto market makers and professional betting groups compete to find an edge.