Wall Street Is Already Betting on Prediction Markets

When Troy Dixon first suggested incorporating prediction markets into the electronic trading platform where he works, he was met with incredulity. “People told us we were crazy,” Dixon, Tradeweb’s cohead of global markets, tells WIRED. But after the company announced it was partnering with Kalshi in February, Dixon says, the mood changed dramatically. “We’ve been inundated with calls,” he says. “We have never had this kind of feedback from clients on any other announcement.”

Tradeweb, which is majority-owned by the London Stock Exchange Group, serves the traditional finance world, including institutional investors like pension and mutual funds, banks, hedge funds, and insurance companies. While most of the public debate over prediction markets is related to their sports offerings—there’s a fierce legal war underway over whether they’re really just sports betting companies—the platforms are also becoming popular among professional traders. Sophisticated investors are interested in them largely because of markets on topics like election results, the Iran war, and the price of Bitcoin. Many of them see prediction markets as forecasting tools that can be used to inform trading decisions. “We’re super excited,” Dixon says. “It’s very rare you have something this new and cutting-edge.”

Kalshi, one of the two biggest players in the industry, is eager to forge closer ties with the finance world. The company is already seeing billions of dollars in trading volume generated by institutional investors on markets in its climate/weather and science/tech categories, according to spokesperson Elisabeth Diana. This week, Kalshi announced it is partnering with XP International, a Brazilian financial services firm. The deal lets Brazilian clients trade on financial and political prediction markets on Kalshi through XP. In a statement, Lucas Rabechini, XP Inc.’s director of financial products, called prediction market contracts “a new asset class.”

Prediction markets are currently regulated in the US by the Commodity Futures Trading Commission, the federal agency that oversees derivatives markets. Although there’s a growing bipartisan push to classify prediction market events as gambling, the CFTC maintains that these platforms are indeed offering financial products.

For Kalshi, cozying up to Wall Street may prove to be a savvy strategy. The company is facing a wave of lawsuits over its sports markets. Anything that highlights its utility in the finance world will help the company make its argument that it’s not a hub for putting money on sports but rather a hub for the future of finance. And although the vast majority of activity on its platform is still from regular people (known in industry lingo as retail traders or click traders) trying to predict the outcome of football games and other athletic competitions, professional traders are also increasingly present.

Some of the biggest names in finance have already jumped into the world of prediction markets. In October 2025, Intercontinental Exchange, the New York Stock Exchange’s parent company, invested $2 billion in Polymarket, Kalshi’s biggest competitor. Jump Trading, a high-frequency trading firm, has taken an equity stake in both Kalshi and Polymarket in exchange for providing the companies with market-making services. (Market-makers buy and sell contracts immediately and are necessary for derivatives markets to function.) Susquehanna International Group, one of the largest market-makers globally, is currently Kalshi’s lead market-maker. SIG also plans to launch its own prediction market offering in collaboration with the fintech company Robinhood and is recruiting staff specifically to trade on prediction markets. A number of prominent brokerages serving blue-chip banking clients, like Clear Street and Marex, are also planning to provide clients access to prediction markets soon.