A New Era for Prediction Markets: How Kalshi Allows You to Trade Real-World Events Directly

Recently, you may have been closely monitoring the movements of the Federal Reserve meetings, trying to predict their interest rate adjustments. Economic data and inflation numbers are sending signals, and even Powell's change in wording hints that an important moment is approaching.

But how to turn this judgment into actual trading?

The traditional approach is to buy bonds, expecting that when interest rates fall, bond prices will rise; or to short the dollar, hoping for the correlation to remain unchanged; or to heavily invest in interest-sensitive tech stocks, anticipating that the market will interpret the news as expected.

However, what if you could trade the Federal Reserve's decisions directly? Instead of playing these indirect "derivative games", you can directly bet on "whether the Federal Reserve will cut interest rates at the next meeting"; if you guess correctly, you can make a profit of 1 dollar per contract.

Now let's look at the field of sports betting. You can buy stocks of a certain sports brand, hoping that a tennis star winning a championship will boost sales; you can short another brand because the athlete they sponsor is eliminated early; you can also invest in a betting company, betting that an increase in viewership will stimulate growth in betting volume. But what if you could directly bet on whether a certain athlete can win the championship? Invest $100, guess correctly and take home $200, without having to delve into corporate financial reports.

Similarly, you can buy stocks of a certain entertainment group, expecting wrestling events to set viewership records; you can short the stocks of competitors; or bet on the surge in sales of related products. But what if you could directly trade on whether a certain player can retain their championship title? Directly stake your funds on the outcome of the storyline, skipping all intermediate steps.

This is exactly what the Kalshi platform allows you to do.

Kalshi is the first prediction market regulated by the Commodity Futures Trading Commission (CFTC) in the United States, where you can directly trade the outcomes of real-world events—not stocks affected by events, not currencies that may fluctuate due to news, but the events themselves.

Let predictions generate value directly

Federal Reserve decisions, election results, Supreme Court rulings, Bitcoin price trends, inflation trends, sports event outcomes... as long as you can form an opinion on an event and there is an objective measurement standard for the outcome, there is likely a corresponding trading market on Kalshi.

A certain prediction market platform pioneered the concept of modern prediction markets, handling billions of dollars in trading volume during the U.S. elections, proving the immense demand for the market. Kalshi has just completed a $185 million financing round at a $2 billion valuation, with several large trading firms providing liquidity for it. A well-known retail brokerage has directly integrated the Kalshi market into its platform, allowing millions of retail traders to participate. An AI company’s artificial intelligence has even been embedded into its trading interface.

This is a regulated, institutional-grade "trading reality" infrastructure. Based on a global layout, Kalshi has brought prediction markets into the regulated U.S. financial system.

Think about what this means: for the first time, you can directly monetize the advantage of predicting real-world events without enduring the friction of traditional financial markets—no complex derivatives, no counterparty risk, and no worrying about whether your hedging tools are actually effective when the event occurs.

If you think the next non-farm payroll report will be surprising, there are corresponding markets; if you believe a certain candidate will win the upcoming election, you can trade related contracts now; if you are certain that artificial intelligence companies will dominate the next decade, you can bet on specific milestones and regulatory outcomes that will determine their fate.

This platform transforms every piece of non-public information, every analytical advantage, and every evidence-based prediction into potential profit opportunities. Unlike traditional markets that exploit information advantages through complex strategies, prediction markets directly reward knowledge.

The Mechanism of Kalshi

Understanding the mechanism of Kalshi is crucial, as the way event contracts operate is different from any financial instrument you have traded before. Let me guide you step by step with an example.

Step 1: Account Setup and Recharge

Create an account on the official website and complete the necessary identity verification (KYC). Since Kalshi is regulated by the CFTC, you need to provide standard documents such as identification and proof of address.

In terms of deposits, the platform offers various options with different limits and processing speeds: bank transfers are free but take 1-2 business days; debit cards are instant but incur a 2% fee with a daily limit of $2,500; stablecoin users can deposit USDC, with a daily limit of $500,000 and processing within 30 minutes; wire transfers are suitable for large amounts but have a minimum requirement.

Step 2: Understand market pricing

Enter any market to view the current pricing structure. Taking the "Will Bitcoin reach $150,000 before 2026" market as an example: currently, the "Yes" contract is quoted at 44 cents, and the "No" contract at 59 cents, which means the market believes there is a 44% chance that Bitcoin will reach $150,000 before 2026.

The interface will clearly show your potential earnings: If you buy the "yes" contract at 44 cents and Bitcoin really rises to $150,000, you can earn $1 per contract, making a profit of 56 cents per contract; if it doesn't rise, the contract will expire worthless.

The trading process is as follows: Suppose you believe Bitcoin will rise to $150,000, and you want to buy 100 "yes" contracts, each costing $0.44, for a total payment of $44. If Bitcoin meets the target before 2026, each contract will redeem for $1, giving you a total of $100, resulting in a profit of $56; if it does not meet the target, the contracts become void, and you lose $44.

Step 3: Place Order

Choose to buy "Yes" or "No" contracts, enter the amount (minimum $1), and the platform will automatically calculate how many contracts you can buy and the maximum profit.

Take the example of Bitcoin: buying a "yes" contract for $1 at $0.44 allows you to purchase about 2.27 shares. If you guess correctly, you can receive $2.27, making a profit of $1.27. The calculation process is transparent before confirming the trade.

The brilliance of this model lies in its simplicity: your maximum loss is the purchase cost, and the maximum profit is 1 dollar per unit minus the purchase price, with no margin call notifications, no complex Greek letters, and no overnight financing costs.

Step 4: Multiple Time Ranges

Many markets offer contracts for the same event with different time frames. The market for Bitcoin at $150,000 has options like "before August" (current probability <1%), "before October" (18% probability), and "before 2026" (43% probability).

Each time frame's trades are independent. If you believe Bitcoin will reach $150,000 next year, you can buy a "yes" contract that expires in 2026 while selling a "yes" contract that expires in August.

Step 5: Monitor and Close

You do not have to hold until expiration; the contract price will fluctuate in real time with news and market sentiment. The platform displays real-time price charts, allowing you to track probability changes.

If major news suddenly affects your position, you can sell immediately. For example, if you buy a Bitcoin "is" contract at 44 cents, and positive news drives the price up to 60 cents, you can sell immediately, earning 16 cents per share without waiting for the final result.

Closing operations are smooth: you can place a market order (trade immediately at the current price) or a limit order (wait for the target price), and potential profit and loss will be displayed before confirming the trade. Settlement is automatically completed through preset data sources—no disputes, no room for interpretation, just look at the data.

Position limits can prevent a single trader from manipulating the market. Most retail investors can trade up to $25,000 per contract, while institutional traders enjoy higher limits. Fees are charged at 0.7%-3.5% of the contract value, depending on market probability, with contracts close to a 50/50 odds having higher fees than extremely unpopular contracts.

Market Classification and Discovery

Kalshi divides the markets into several categories: politics, sports, economics, cryptocurrency, climate, etc. Popular sectors highlight markets with high activity or recent price fluctuations.

The platform also has a "Views" section where users discuss market analysis and share trading logic. This community attribute helps you discover new markets and understand different views on the probabilities of events.

For active traders, Kalshi provides API interfaces that support algorithmic trading and data analysis: you can access historical price data, automate orders, and integrate the Kalshi market into broader trading strategies.

The platform also provides detailed transaction volume and open interest data for each contract, helping you assess liquidity before making large trades.

Its brilliance lies in its simplicity: no complex derivatives, no leverage, counterparty risk is limited to the exchange itself, only a pure information market, with transparent and regulated settlement.

Investment managers use Kalshi to hedge specific event risks that traditional tools find difficult to efficiently cover: clean energy funds worried about regulatory changes can directly trade policy outcome contracts to hedge; portfolios heavily invested in tech stocks can hedge against antitrust action risks by trading related legal markets.

If you hold an asset of 1 million dollars, certain policy changes could reduce it by 20%. Spending 50,000 dollars to buy a hedge contract with a 25% probability means that if the event occurs, you can receive 200,000 dollars, which would just offset the losses in your portfolio.

Traders with expertise can directly monetize their knowledge: insiders in the political sphere trade in election markets, economic analysts trade in Federal Reserve decision contracts, and industry experts trade in regulatory outcome markets. Unlike the stock market—where information advantages can be quickly arbitraged away through complex derivative strategies—event markets allow for excellent predictions to be directly converted into profits. Your advantage in predicting FDA approvals or Supreme Court rulings can immediately translate into trading gains.

AI Integration

Our recent collaboration with an AI company has shown us the future of information trading.

The integration of AI provides real-time analysis of on-chain data, historical odds, and breaking news within the Kalshi interface. Before placing an order, users can query the AI for event background information, probability assessments, and relevant data trends.

This creates a feedback loop: artificial intelligence helps traders make better predictions, and the prediction market outcomes can further train the AI system's predictive capabilities. AI is tested in real-time probability assessments, while traders gain AI-enhanced information analysis.

Its impact goes beyond individual trading decisions: as AI systems become better at processing massive amounts of information and identifying probability patterns, prediction markets will become more efficient. This means narrower spreads, more accurate price discovery, and more practical hedging applications.

Prediction Market Platform Comparison

There are now two complementary leaders in the prediction market space: a certain decentralized platform that has pioneered the prediction market industry with crypto-native innovations, while Kalshi was born for Wall Street.

Core Differences

Kalshi is fully regulated by the CFTC, funds are held in federally insured accounts, disputes are resolved through clear processes, and all operational methods are consistent with traditional finance: deposit via bank transfer, trade in USD, and withdraw to checking accounts.

A certain decentralized platform settles using USDC, resolves disputes through decentralized prediction markets, proving the feasibility of the model globally. Recently, it also obtained the appropriate license in the United States and is preparing to expand into regulated markets.

Audience Differences

Institutional funds are flowing to Kalshi as regulation brings certainty: multiple large market makers are providing liquidity, with a monthly trading volume exceeding $1 billion proving that mainstream markets prefer compliant platforms.

The innovation and global reach of a certain decentralized platform have attracted crypto-native users and international traders who value decentralization and permissionless access. Its early success has validated the value of the entire prediction market category.

conclusion

For American users who value regulatory protection and integration with traditional finance, Kalshi has obvious advantages; for global users who adapt to crypto infrastructure and recognize decentralized innovation, the latter has unique value. The two platforms never