Kalshi, Tradeweb Team Up to Expand Institutional Access to Prediction Markets

• Tradeweb is also taking a stake in Kalshi
• The two companies will explore “an institutional-focused portal for event contracts”
• Partnership could bolster Kalshi’s footprint among institutional traders

Tradeweb Markets (NASDAQ: TW), which runs electronic markets for a variety of financial instruments, and Kalshi announced a partnership aimed at expanding the prediction market operator’s exposure to institutional market participants.

The partnership will be rolled out in two stages. First, Kalshi’s forecasts and market data will be integrated directly into the credit and interest rates platforms operated by Tradeweb. Tradeweb runs electronic markets spanning credit, equities, interest rates, and money markets with a combined notional daily trading volume of $2.6 trillion.

(Second) build prediction markets trading functionality on Tradeweb, powered by Kalshi markets,” said Kalshi co-founder and CEO Tarek Mansour in a post on X. “Tradeweb offers trading on government bonds, interest rate swaps, credit products, mortgage backed securities, money markets, and ETFs. Soon, you’ll be able to add prediction markets to your portfolio and manage it all in one platform.”

Tradeweb is also taking a minority stake in Kalshi, but the size and terms of that investment weren’t revealed. Following a $1 billion funding round late last year, privately held Kalshi was valued at $11 billion.

Good Timing for Kalshi, Tradeweb Partnership

News of the Kalshi/Tradeweb partnership emerged a day after the Federal Reserve published a research paper in which it notes the prediction market platform isn’t just additive in forecasting macroeconomic data, it may be superior to other methods.

“We compare Kalshi with more traditional survey and market-implied forecasts, examine how expectations respond to macroeconomic and financial news, and how policy signals are interpreted by market participants,” according to the Fed researchers. “Our results suggest that Kalshi markets provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers.”

“Leveraging Kalshi’s advanced prediction markets platform, this initiative will focus on providing access to standardized event contracts including macroeconomic releases, Fed policy, political elections, and other key policy outcomes, with Tradeweb acting as the institutional front end to this potential new marketplace,” according to the statement.

Why It Matters

Large prediction market operators, including Kalshi, frequently unveil partnerships, but the Tradeweb could be among the most important because it arrives at a time when, by some estimates, sports event contracts account for 85% to 90% of turnover on yes/no exchanges.

Some industry observers argue that in order for prediction markets to flourish over the long-term, operators must source growth from areas outside of sports. Some members of the Wall Street community noted it’d be disappointing if the ultimate outcome for prediction markets is merely being an alternative to traditional sports wagering.

The industry can avoid that distinction by expanding its use cases with professional investors potentially representing an eager, mostly untapped audience for growth outside of sports.

“This partnership will give Tradeweb’s corporate client base access to better risk pricing and the ability to hedge against a wide range of events that are top of mind: recession this year? new tariff wave? election outcome? Fed cut? government shutdown? Hurricane in Florida? New legislation?,” adds Mansour.