Polymarket widens lead over Kalshi in political prediction markets

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Polymarket dominates political betting

Highlights

Political prediction trading rose 34.2% to $396 million in early November.
Polymarket leads Kalshi in political markets, with elections driving demand.
Political contracts offer diversification as sports betting faces regulatory scrutiny.

Political prediction markets generated $396 million in trading volume during the first week of November, an increase of 34.2% from the previous week, according to Cryptopolitan. Activity has nearly tripled since early October, with the midterm elections providing the main catalyst for increased trading and liquidity.

Polymarket extends its lead over Kalshi in political betting

Polymarket continues to attract substantially more political trading activity than Kalshi, with volumes reportedly exceeding those of its competitor by 300% to 900%, depending on the market category. Election-related contracts account for approximately 12% of Polymarket's overall trading volume, making politics its third-largest segment.

The two platforms have developed different trading profiles. Political contracts represent only about 1.5% of Kalshi's volume, while sports account for 85.2%. Polymarket's U.S. platform is similarly dependent on sports, which generate 95.4% of its activity. The broader Polymarket platform, however, has retained a stronger position in political and election-related markets.

Election demand strengthens liquidity and open interest

Polymarket's recovery extends beyond individual election contracts. The platform's total value locked briefly exceeded $400 million in late October, while decentralized exchange trading volumes have recently run about 30% above their slower summer levels, based on DeFiLlama figures cited in the report.

Open interest also reached a reported peak of $762.65 million in early November. That increase suggests traders were maintaining substantial positions across political outcomes and other real-world events. Activity recovered despite a recent front-end security incident that reportedly resulted in losses from user wallets.

Political markets offer an alternative to sports betting

The growth of election trading could become increasingly important as prediction market operators face questions about how sports-related contracts should be regulated. Heavy reliance on sports exposes platforms to potential restrictions under U.S. state gambling laws, while political and economic events provide opportunities to diversify trading activity.

Political outcomes are also influencing cryptocurrency markets. PolitiFi tokens retained a combined market capitalization above $400 million in November, although individual assets reacted unevenly to the midterm results. The Official Trump token declined amid concerns about possible scrutiny of Trump-linked crypto businesses, while smaller political meme tokens experienced brief rallies. For Polymarket, sustained election trading offers a way to build liquidity beyond sports, even between major presidential contests.

As we previously reported, Polymarket faces renewed CFTC probe over U.S. access controls.

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