Is Kalshi's Volume Real?

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This piece was written and researched by Omar El Safy and edited by Pet Berisha.

Our Q2 2026 report is still up. Prediction markets traded $111 billion in the quarter, more than 2024 and 2025 combined, across 70 pages of charts, and it is free. Read below 👇

Kalshi traded $58.78B of event contracts in the first 29 days of September 2026, and another $27.32B of perpetual futures (futures contracts with no expiry date), per Kalshi's own data.

It was their biggest month on record for both.

In the same month,

All of it landed while Kalshi are raising about $1B at a valuation of about $40B, per Reuters. An IPO is possible as early as 2027.

The biggest single day for event contracts was recent: an NFL Sunday, 27 September 2026, at $3.04B.

For perps, it was 21 September 2026, at $1.64B, the day after the analyst's thread.

Quick note: combos (parlays) accounted for 88% of the month-on-month growth in event contracts.

On 20 September 2026, after some back-and-forth with Kalshi employees on X, Beni, co-founder of the research firm Stealth Neolab, posted figures for Kalshi's ether perpetuals.

His argument rests on two numbers.

A high ratio between the two suggests the same positions are being opened and closed many times a day, which fast traders and market makers do as well as wash traders.

For context, on 1 October 2026, ether perps traded about 1.3x their open interest on Binance and 0.3x on Hyperliquid, per their own data.

Kalshi's was 52x.

Beni's figures put Kalshi's ether perp at $539M of volume in 24 hours against $3.1M of open interest, 174x, so every $1 held in a position was traded about $174 that day. He also found that trades of exactly $5,500 made up 48% to 58% of its volume on four separate days.

In a discussion on X, IcoBeast, who is helping build Kalshi's crypto markets program, told Beni this was not the case.

The Wall Street Journal then reported nearly 1M near-identical trades in the ether perp, over $5B of volume in a month, and said the CFTC were examining them.

Kalshi's response said the repeated $5,500 trades came from market makers keeping fixed-size orders on the book that faster traders kept hitting. They said their liquidity programs "do not reward volume traded, just resting liquidity provided."

It does not mention the Volume Incentive Program, which paid ordinary traders for every contract traded.

Kalshi extended it to perps on 18 August 2026, after announcing the change in a filing on 4 August 2026, so we looked at Kalshi's own perps data across the month.

In the first nine days of August 2026, Kalshi's perps traded about $130M a day. From 10 August 2026 that jumped to about $441M, and after the rewards started on 18 August 2026 to about $760M. We cannot tell from the data what set off the first jump.

If more people genuinely wanted to trade, you would expect more money held in positions too. Instead, the same money was traded back and forth far more. In early August 2026, each $1 held in a position was traded about $12 a day. After 18 August 2026, about $36, and on the ether perp about $96. For comparison, on Binance on 1 October 2026 it was about $1.30.

Kalshi's perps were already well above other venues before the rewards, and the gap widened once they were turned on. Open interest did grow, from $14.2M to $29.1M on average by September 2026, but volume grew faster.

On 28 September 2026, Kalshi filed with the CFTC to end the Volume Incentive Program no earlier than 13 October 2026. The filing gives no reason, and the market maker programs stay in place.

The economist Charles Goodhart gave his name to the rule usually put as "when a measure becomes a target, it ceases to be a good measure." In plain terms, once people are paid on a number, they find ways to move it, and it stops telling you what it used to.

In prediction markets, that number is tied to notional volume.

It makes the headlines, it decides who ranks first, and it is what investors look at when Kalshi raise money, and that valuation is now reportedly an eye-watering $40B.

Kalshi's filing says the program was there to boost liquidity and make prices more efficient. What it paid on was volume.

So the program, the headline and the valuation all rewarded the same thing: more contracts traded, whether or not anyone wanted to hold them.

Kalshi are not unusual in paying for activity.

Kalshi's own market maker programs work the same way.

However, Kalshi's Volume Incentive Program worked differently.

They set aside a pot of money for each period and shared it out by how many contracts each trader traded. Trade 10% of the contracts and you got roughly 10% of the pot.

Buying a contract and selling it a minute later counted twice, and holding a position for a week earned nothing extra. So this incentivised velocity of contracts.

On event contracts, only trades priced between 3¢ and 97¢ counted. On perps, from 18 August 2026, every contract counted.

The CFTC warned about programs like this on 12 August 2026. Their staff advisory said that "volume-based rewards with steep tiers or threshold bonuses can encourage participants to trade solely to reach volume targets, heightening risks of wash-trading."

On the evidence so far, the trades happened.

Kalshi say they block self-trades, perps open interest doubled between early August 2026 and September 2026, and the CFTC have not opened a formal investigation.

But public data carries no trader IDs, so nobody outside Kalshi and the CFTC can see who traded with whom.

Kalshi's replacement program, filed on 25 September 2026, pays on deposits and trading, caps rewards at $5,000 per person over two years, and excludes trades under inquiry for wash trading or self-matching.

The volume questions landed in a fortnight of pressure on Kalshi. On 25 September 2026 the Sixth Circuit ruled that Ohio and Tennessee can apply their gambling laws to Kalshi's sports contracts.

Four New Mexico tribes asked a federal judge to block Kalshi on their lands, and Robinhood ($HOOD ( ▼ 0.13% )), Kalshi's biggest distribution partner, announced their own crypto perps.

Wash trading is banned under section 4c of the Commodity Exchange Act, and CFTC rules require an exchange like Kalshi to prohibit it and police it on their own markets.

The closest precedent is Coinbase ($COIN ( ▲ 1.82% )). In March 2021 the CFTC fined them $6.5M for false, misleading or inaccurate volume reporting between 2015 and 2018, partly from two of their own trading programs matching with each other, and for wash trading by a former employee. That was a small sum next to the $1.28B of revenue Coinbase reported for 2020, and they listed on Nasdaq four weeks later.

So going by that precedent, a fine is unlikely to be the main cost for Kalshi. The bigger cost would be their standing with the CFTC itself.

Kalshi's case against the states rests on the CFTC being their regulator, and they have lost that argument on appeal in the Ninth Circuit and now the Sixth, as we previously covered.

A CFTC finding that Kalshi's own markets carried wash trading is something the states could point to in court. And it would land in the middle of a raise at about $40B that is priced on volume.

Predicted is written by Pet Berisha and Omar El Safy. Find every newsletter, our quarterly State of Prediction Markets reports and more at predicted.co.

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