Prop Firm Jump Trading Enters Prediction Markets Under the Radar as Volumes Surge

Jump Trading has begun making markets on Kalshi, becoming one of the first major proprietary trading firms to participate in the event-betting business that's drawing interest from both Wall Street and Silicon Valley.

The Chicago-based firm has been providing liquidity on event contracts that allow users to wager on everything from elections to sports outcomes, according to Bloomberg, quoting people familiar with the matter who requested anonymity.

The move comes as prediction markets experience explosive growth, with platforms like Kalshi and Polymarket handling a combined $7.4 billion in trades during October alone. Sports contracts have emerged as the dominant category, accounting for $1.1 billion of Kalshi's volume in the final week of October.

Institutional Players Test New Prediction Market Waters

Jump's entry follows signals from other major financial firms that they're weighing participation in event markets. AQR Capital Management co-founder Cliff Asness recently said his firm is considering an expansion into sports betting, while Susquehanna International Group has been providing liquidity on Kalshi for some time.

The activity represents a shift for prediction markets, which until recently operated on volumes too small to attract established trading operations. Kalshi just raised $1 billion at an $11 billion valuation, up from $5 billion only a month earlier. The funding round, backed by Sequoia Capital, CapitalG, and Andreessen Horowitz, puts Kalshi within reach of Polymarket's estimated $12 billion to $15 billion valuation.

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Jump previously operated a sports-betting team in London that traded on platforms like Betfair during the late 2010s, but wound down that effort around 2023. Jump Capital, the investment arm created by Jump Trading's founders, also backed Sporttrade, an early regulated prediction market.

Crypto Exchange Builds Kalshi-Powered Platform

Coinbase is, reportedly, developing a prediction markets platform that will use Kalshi's regulated infrastructure, according to screenshots uncovered by tech researcher Jane Manchun Wong. The images show a fully designed interface branded with Coinbase's logo and indicate the platform will be operated through Coinbase Financial Markets, the exchange's derivatives division.

The platform would allow users to deposit USDC stablecoins and trade on various event categories including economics, sports, politics, and technology. Coinbase executive Max Branzburg said in August that the company was building an “exchange for everything” and exploring tokenized stocks and prediction markets.

Public access to the unreleased Coinbase platform was removed shortly after Wong disclosed the screenshots.

Retail Brokers See Rapid Adoption

Robinhood reported that users traded 2.3 billion event contracts between July and September, with October volume hitting 2.5 billion. The company said prediction markets and its Bitstamp acquisition together generate approximately $100 million in annualized revenue.

Total revenue for Robinhood's third quarter reached $1.27 billion, up 129% from the prior year, beating analyst expectations. Chief Financial Officer Jason Warnick said the company saw record monthly volumes across equities, options, prediction markets, and futures in October.

Sneakers Join Event Contracts

Kalshi announced a partnership with StockX that adds a new category of event contracts tied to resale prices for sneakers, collectibles, and other high-demand consumer products. Users can now bet on whether specific sneaker releases will exceed certain resale price thresholds, or which brands will dominate StockX sales during major shopping events.

Initial contracts cover items ranging from holiday sneaker releases and Supreme apparel to Pokémon card collections and Pop Mart Labubu figurines. StockX provides aggregated, anonymized market data to inform contract creation.

Tarek Mansour, the Founder and CEO of Kalshi

“Sneaker, apparel, and collectible drops on StockX have become defining cultural moments with clear, measurable outcomes, the very kind of real-world events Kalshi was built for,” said Tarek Mansour, Kalshi's co-founder and chief executive.

Regulatory Questions Persist

State gaming regulators and Native American tribes have challenged the legality of prediction markets in ongoing court cases. The platforms have grown by classifying wagers as regulated financial contracts rather than gambling, allowing them to sidestep state gaming laws.

The Commodity Futures Trading Commission, which oversees the exchanges, has not moved to halt trading. Kalshi operates under CFTC regulation, while Polymarket faces scrutiny over its decentralized structure and has been blocked in Romania over unlicensed gambling concerns.

For prediction markets to continue scaling, they'll need deeper liquidity from participants willing to take both sides of trades, the role that firms like Jump Trading and Susquehanna have long played in traditional markets.