Prediction Market Kalshi to Take Bets on Crypto (Settled in Dollars)
Cryptocurrency enthusiasts have a new avenue to explore as the CFTC-regulated platform, Kalshi, introduces prediction markets focused on the crypto realm. Traders can now wager on various cryptocurrency price outcomes, all settled in U.S. dollars. This move comes amidst a resurgence of interest in both cryptocurrency and prediction markets.
Betting on Crypto
Starting this week, Kalshi will unveil prediction markets covering five distinct cryptocurrency price scenarios. These include speculations on when Bitcoin will hit $100,000 and the peak price Ethereum’s ether will achieve by 2024. The platform plans to expand its offerings with additional markets set to go live shortly.
To clarify, although these bets revolve around cryptocurrency, they will be denominated in U.S. dollars, aligning with Kalshi’s existing market practices. Traders on the platform have previously engaged in predicting various events, such as the number of Federal Reserve rate cuts in a year, snowfall measurements in New York, and even the winner of the Oscar for best screenplay.
Cryptocurrency Market
Crypto Market Surge
Kalshi’s foray into the crypto sphere coincides with what appears to be the beginning of a bull market for digital assets. Recent developments, including the introduction of bitcoin exchange-traded funds, have propelled prices to new heights. The CoinDesk 20 Index, a benchmark for major digital assets, has surged by nearly 50% since the start of the year.
Prediction Markets on the Rise
This strategic move by Kalshi also aligns with the resurgence of interest in prediction markets, which have historically been niche activities. Researchers at Bitwise Investments predict that over $100 million will be wagered in prediction markets by 2024, positioning them as a significant application within the crypto space. Noteworthy figures like former U.S. President Donald Trump have shown interest in crypto-based prediction markets, leveraging them to gauge public sentiment.
Advocates argue that prediction markets serve a higher purpose beyond mere gambling. By incentivizing participants to back their beliefs with financial stakes, these markets provide insights into genuine sentiments, offering a counterbalance to traditional polls and pundits.
The Essence of Prediction Markets
Typically, prediction markets revolve around binary questions with verifiable outcomes within a specified timeframe. For instance, on Kalshi’s ‘US bans TikTok this year?’ market, shares indicating ‘yes’ were trading at 25 cents, implying a 25% likelihood of a ban before the year’s end. Conversely, ’no’ shares were valued at 78 cents. Each share pays out $1 if the prediction materializes, otherwise yielding no returns.
Stay tuned as Kalshi’s venture into crypto prediction markets unfolds, providing traders with a unique opportunity to engage with the evolving landscape of digital assets.
