Prediction Market Kalshi to Take Bets on Crypto (Settled in Dollars)

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Marc Hochstein is the executive editor of Consensus, CoinDesk's flagship event. He holds BTC above CoinDesk's disclosure threshold of $1K and de minimis amounts of other digital assets (details on profile page).

Kalshi, the lone regulated prediction market platform in the U.S., is moving to grab a piece of the crypto action as digital currencies bounce back from a two-year slump.Kalshi's move into crypto comes at the apparent dawn of a bull market for digital assets, as the launch of bitcoin exchange-traded funds and other factors have sent prices soaring.

Typically, prediction markets are framed as yes-or-no questions about verifiable outcomes within a set time period. For example, on Kalshi's"" market,"yes" shares were trading Sunday at 25 cents, signaling the market saw a 25% chance of a ban before Dec. 31, and"no" shares were changing hands at 78 cents. Each share pays out $1 if the prediction turns out to be correct, and bupkis if it's wrong.

Polymarket is barred from doing business in the U.S. under a settlement with the Commodity Futures Trading Commission. That leaves an opening for Kalshi, which is licensed by the CFTC, to pick up business from U.S. traders who want to speculate on crypto price movements without buying or selling crypto.fighting the CFTC in court

PredictIt, a popular site for election betting, operates in the U.S. under a no-action letter, or special exemption, from the CFTC that restricts the platform's growth and activities. It, too, sued the CFTC after the regulator ordered it toin a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence.

 

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