A look at Kalshi and Polymarket's rise; reports say Polymarket had 491K monthly active traders in December 2025, and <0.04% of addresses took 70% of profits
Two months after quitting his job as a corporate C.P.A. to trade full time in prediction markets, Joel Holsinger, 26, was well along the road to making his first $100,000.
Context & Ripple Effects
The rise of Kalshi and Polymarket follows an earlier period of expanding activity and financing: Kalshi had reported substantial volume, while both platforms drew major investment interest. This story adds a crucial qualifier to growth narratives: participation can broaden while trading gains remain sharply concentrated.
That concentration is consistent with a later account-level analysis of Polymarket profit concentration, while the reported increase in suspicious-trade investigations at the platforms shows why market quality matters as these venues attract more attention.
First-order effects
- Polymarket’s reported trader base is large enough to support a full-time-trading aspiration for some participants, but the reported profit split indicates that most traders are competing for a comparatively small share of realized gains.
- For Polymarket, high participation alongside concentrated profits makes liquidity and outcomes—not user counts alone—the more consequential measures of marketplace health.
Second-order effects
- Kalshi and Polymarket face stronger incentives to demonstrate that their markets are fair and usable for less-sophisticated participants, since persistent winner concentration can weaken repeat participation.
- As more capital and attention enter prediction markets, platforms may need to invest more in surveillance and market-integrity operations; Kalshi’s reported scrutiny of suspicious trades makes that operational burden visible.
Third-order effects
- Prediction markets may increasingly resemble other liquidity venues: a broad base supplies activity, while specialized, high-frequency or better-informed traders capture disproportionate value.
- If concentration persists, the sector’s durable advantage will depend less on headline user growth and more on whether platforms can balance deep liquidity, credible integrity controls, and access for occasional traders.
The trend: Prediction-market platformization is shifting the sector from a novelty trading category toward a liquidity business where informed trading, trust, and market design determine who captures value.