Prediction markets are probably the hottest topic in all of finance and tech right now.

They’ve landed awkwardly in a place that cuts horizontally across sports, gambling, capital markets, crypto and much more.

And thus, Sporting Crypto is obliged, of course, to cover it. So much so that we actually spun out a prediction market newsletter called ‘Predicted’ that you should definitely sign up for.

In this edition, we do a deep dive into the report we just launched over on Predicted. It’s the ‘State of Prediction Markets Q2 2026’, and it’s probably the best aggregation of insights and analytics for prediction markets that I’ve seen (yes, I’m extremely biased).

The best hits are from the 70 pager are in this edition!

Discussed in this edition of Sporting Crypto:

Haven’t already subscribed? Join 5750 + Leaders in Blockchain & Sports from brands like FIFA, NBA, Premier League, NHL, reading Sporting Crypto every week

Prediction markets recorded $111 billion in notional volume between April and June 2026, per Artemis.

That is more than 2024 and 2025 combined, and roughly 2x the entirety of 2025 on its own.

Year on year, that is a 1,764% increase from Q2 2025.

Volume hit $28.5 billion in April 2026, $30.2 billion in May 2026, then $52.7 billion in June 2026, the biggest month in prediction markets so far, largely fuelled by the World Cup frenzy.

June 2026 alone accounted for 47% of Q2’s volume.

Sports was still the biggest category by a distance.

In fact, Kalshi was 86% sports in Q2 2026.

By June it was more concentrated still. Kalshi traded $33 billion that month and roughly 87% of it was sports.

The World Cup accounted for $17.04 billion of the quarter, or 15.3% of total volume.

In the US, prediction market apps had more daily active users than the sportsbook apps during the tournament, per Apptopia.

Q2 was where the big boys came to play.

Robinhood ($HOOD ( ▲ 0.86% )) launched Rothera in June, their own CFTC licensed exchange and clearing house, built as a joint venture with Susquehanna. It has cleared over 3.5 billion contracts since.

It went live just before the World Cup started, and 98% of its Q2 volume came from the tournament.

By the end of the quarter Rothera had cleared 2.1 billion of Robinhood’s 13.6 billion contracts, at a lower take than the rented rails it replaced.

Robinhood booked $156 million of event contract revenue in Q2, and now earn more from prediction markets than from stocks or crypto, which is insane.

Coinbase, by contrast, reported a rate of over $100 million annualised, roughly a 6x gap right now.

Polymarket US rose from 3% of total Polymarket volume to 27% in six months.

They went into combos in time for the World Cup, and launched their own stablecoin in pUSD, which hit $500m in circulation.

Polymarket also keep taking the majority of new onchain wallets each month, and brought in dynamic fees on the international platform during the quarter.

Kalshi introduced Combos in December 2025. By Q2 2026 they were ~30% of its notional volume. Polymarket introduced them just before the World Cup, so the dataset there is smaller.

A sportsbook parlay is a single-counterparty bet in which the book sets the line and guarantees a payout.

A Kalshi combo is priced by market makers through a request for quote (RFQ) system, and the hold gets split between the makers and the exchange.

Which brings us to the gap between notional and handle metrics.

Kalshi’s combos are ~30% of Q2 notional on $1.67 billion of handle.

An event contract settles at $1 or $0. Notional counts the contracts at their full $1 value, so it measures the maximum that could pay out. Handle is the cash that actually gets risked.

On a single contract, those two sit reasonably close together. A contract trading at 50c books a dollar of notional for fifty cents of stake. So the ratio of notional to handle is 2:1.

A combo multiplies the legs together. Four legs at even odds each land at a combined implied probability of around 6%, so the buyer pays roughly 6c for a contract that still books a full dollar of notional.

Kalshi traded roughly $65.7 billion across Q2, going on the monthly figures we have reported here, $14.8 billion in April, $17.91 billion in May and $33 billion in June. At 30%, combos were around $20 billion of that notional, sitting on $1.67 billion of handle. That is about twelve dollars of headline volume for every dollar staked.

Every extra leg at evens halves the probability and halves the stake, while the notional stays at a dollar. Kalshi’s $20 billion of combo notional on $1.67 billion of handle works out at an average combined probability of about 8.4%, which sits between a three and a four leg combo.

So this isn’t faux volume, but there is more than meets the eye, because combos carry a different risk profile, and net different economics compared to single event contracts. I’d wager (no pun intended) that the net revenue on combos is razor thin, compared to single event contracts.

The Jeffrey, a bar on the Upper East Side, promised free drinks if the Knicks won Game 1 of the Finals, which was roughly $10K of exposure if the promotion hit. A $5K Kalshi position paid $8K when the Knicks won 105-95. They ‘broke even on a risky promotion, bought peace of mind for the night’.

CA Osasuna did the same thing with relegation. Going down from Spain’s top league La Liga would have cost the club millions in lost broadcast money, so they bought coverage. Howden arranged €6 million of protection for a €1.2 million premium, Game Point Capital and Greenlight structured it, the contract was written on Kalshi, and Susquehanna took the other side.

Osasuna stayed up in 17th, so the contract expired worthless and the €1.2 million premium was simply the cost of the cover. The club call it ‘a common practice in professional football’, and Kalshi have since filed a formal hedging programme with the CFTC. We covered both of those at the time.

In both cases, the buyer already carried the risk and used the exchange to lay it off, with a market maker pricing the other side.

And that is fascinating because they are to some extent, hedging where the counterparty is a mixture of people wagering and market makers.

Meta ($META ( ▲ 0.29% )) considered buying Kalshi, then told staff to build Arena instead, which I we we covered in July 2026.

Hyperliquid brought prediction markets onchain through HIP-4 and took 0.3% market share in their first quarter. Their outcome markets are fully collateralised binary contracts that settle at 0 or 1, with no leverage and no liquidations, traded in the same account as perps and spot.

Adjacent launched their RED and BLUE indices in late June and raised a $2.5 million pre-seed led by Night Capital, pitching a benchmark layer above the venues rather than another order book.

Kalshi listed forward curves for GPU rental prices on 14 July, tracking what it costs to rent Nvidia’s B200, H200 and A100 chips by the hour over the coming weeks and months. As Kalshi CEO Tarek Mansour put it: ‘Compute is the new oil. Like every commodity before it, it needs a real derivatives market.’

A forward curve is a chart of what the market expects something to cost in future. Fix your energy tariff or your mortgage rate and you have used one. Two firms write the number into a private deal, and Kalshi only earn a fee when they trade the underlying contracts to lock the price in.

So while right now sports is the thing that has caught fire across the board, the expectation is that long-term that dominance will decrease. And Q2 was a window into that, with a variety of new product offerings coming to the fore.

The full report is over 70 pages, and it is free.

Thanks for reading the latest edition of the Sporting Crypto newsletter!

If you enjoyed this, please tell your friends who might be interested and share it on socials.

This newsletter is for informational purposes only and is not financial, business or legal advice. These are the author’s thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies or projects mentioned are for illustrative purposes unless specified.

The contents of this newsletter should not be used in any public or private domain without the express permission of the author.

The contents of this newsletter should not be used for any commercial activity, for example - research report, consultancy activity, or paywalled article without the express permission of the author.

Please note, the services and products advertised by our sponsors (by use of terminology such as but not limited to; supported by, sponsored by or brought to you by) in this newsletter carry inherent risks and should not be regarded as completely safe or risk-free. Third-party entities provide these services and products, and we do not control, endorse, or guarantee the accuracy, efficacy, or safety of their offerings.

It's crucial to provide our readers with clear information regarding the inherent nature of services and products that might be covered in this newsletter, including those advertised by our sponsors from time to time. When you buy cryptoassets (including NFTs) your capital is at risk. Risks associated with cryptoassets include price volatility, loss of capital (the value of your cryptoassets could drop to zero), complexity, lack of regulation and lack of protection. Most service providers operating in the cryptoasset industry do not currently operate in a regulated industry. Therefore, please be aware that when you buy cryptoassets, you are not protected under financial compensation schemes and protections typically afforded to investors when dealing with regulated and authorised entities to operate as financial services firm.