Kalshi is the early leader in prediction markets, but its rival Polymarket is worth nearly twice as much. Why?

Core Insights - The competition between Kalshi and Polymarket in the prediction markets sector highlights a disparity in valuations, with Kalshi valued at $5 billion and Polymarket at $9 billion despite Kalshi's early lead in the U.S. market [2][4]. Company Overview - Kalshi is gaining traction in the U.S. prediction market, attracting users who bet on various events, while Polymarket is still in the process of obtaining legal approval to operate in the U.S. [2][3]. - Polymarket's operations are built on blockchain technology, giving it a unique advantage in the crypto space, while Kalshi is working to integrate crypto capabilities [3][4]. Market Dynamics - The rise of prediction markets has been facilitated by a more favorable regulatory environment in 2024, allowing both companies to seek funding and expand their user bases [2]. - Despite Kalshi's success in the U.S. sports gambling market and higher app downloads, Polymarket's valuation is significantly higher, attributed to its potential token drop and crypto association [4][5]. Leadership and Challenges - Both companies are led by CEOs with questionable reputations; Polymarket's CEO faces concerns about his maturity, while Kalshi's CEO has been criticized for unethical tactics [6][7].