Prediction Markets Face Alarming Post-Election Decline: What’s Next for Polymarket and Kalshi?
The buzz around prediction markets reached a fever pitch during the 2024 U.S. presidential election, drawing in a massive influx of users eager to bet on political outcomes. Platforms like Polymarket and Kalshi became household names in certain circles, showcasing the power of decentralized and centralized prediction markets to capture real-time sentiment. But what happens when the main event is over? Recent data reveals a stark reality: both Polymarket and Kalshi have experienced a dramatic decline in daily active users (DAUs) and downloads, raising critical questions about their long-term sustainability and the future of prediction markets beyond high-profile events.
**Prediction Markets** See Steep Decline: A Post-Election Reality Check
The 2024 U.S. presidential election was a golden age for prediction markets. Millions flocked to platforms like Polymarket and Kalshi, transforming them into significant hubs for speculative activity. Kalshi, a regulated U.S. exchange, peaked at an impressive 400,000 daily active users (DAUs) in November 2024. Polymarket, a blockchain-based platform, also saw its DAUs soar to 300,000 during the same period. These numbers were unprecedented, suggesting a burgeoning mainstream interest in event-based trading.
However, the post-election landscape tells a different story. By mid-June 2025, the enthusiasm had largely dissipated. Kalshi’s DAUs plummeted to a range of 27,000–32,000, representing a staggering 93% drop from its peak. Polymarket fared even worse, with its DAUs falling to a mere 5,000–10,000, a precipitous 97%–98% decline. Daily downloads mirrored this trend:
| Metric | Peak (Nov 2024) | Mid-June 2025 | Decline (%) |
|---|---|---|---|
| Kalshi DAUs | 400,000 | 27,000–32,000 | ~93% |
| Polymarket DAUs | 300,000 | 5,000–10,000 | ~97-98% |
| Kalshi Daily Downloads | >100,000 (Oct 2024) | ~13,000 | ~87% |
| Polymarket Daily Downloads | <50,000 | 5,000–10,000 | ~80-90% |
These figures highlight a significant challenge: how to sustain engagement beyond the magnetic pull of a major election. The platforms’ post-election lull suggests that while high-profile events can drive mass adoption, converting those casual users into long-term participants is a complex task.
The **Polymarket** and **Kalshi** Plunge: Unpacking the **DAU** Drop
The dramatic fall in **DAUs** for both Polymarket and Kalshi can be attributed to several factors. Primarily, the 2024 election acted as a unique, high-attention catalyst that drew in a broad spectrum of users, many of whom were likely new to prediction markets or even speculative trading in general. These ‘casual users’ were seeking quick profits or simply engaging with a novel way to follow the election, rather than committing to long-term participation.
Here’s a breakdown of contributing factors:
- Event-Driven Peaks: Like many speculative platforms, prediction markets thrive on volatility and major events. Once the certainty of the election outcome was established, the immediate incentive for many users vanished.
- Speculative Fatigue: The intensity of the election cycle might have led to ‘speculative fatigue’ among some users who were primarily drawn by the excitement rather than a deep interest in market mechanics.
- Niche Appeal: Unlike mainstream apps such as TikTok, which boasts an average of 69 million DAUs, prediction markets inherently cater to a more niche audience interested in specific event outcomes. The election temporarily broadened this niche, but it reverted to its core.
- Regulatory Ambiguity: For Polymarket, which is currently barred from serving U.S. customers, sustained growth is challenging. While Kalshi operates within U.S. regulations, the broader regulatory environment for prediction markets remains a ‘gray area,’ potentially deterring some institutional or long-term users.
This dynamic is not entirely unique; speculative trading platforms often see attrition after major market events. However, the scale of this decline underscores the need for these platforms to diversify their offerings and user acquisition strategies.
Beyond the **Election Surge**: Sustaining **Prediction Markets** Momentum
Despite the steep drop in overall user numbers, the story isn’t entirely bleak for prediction markets. The data reveals pockets of sustained interest, particularly around other significant, albeit smaller, events. For instance, in May 2025, Polymarket and Kalshi collectively facilitated over $40 million in trades related to the papal conclave. This period, marked by unexpected outcomes and heightened speculation, demonstrated that there’s still significant demand for prediction markets when real-time data and uncertainty converge.
Both platforms have also observed spikes in activity for a variety of non-presidential events, including:
- New York’s mayoral primary
- The Super Bowl
- Pop culture phenomena like The White Lotus finale
These examples indicate that while the ‘election surge’ was a unique driver, the platforms can still leverage other high-attention events to maintain relevance and engage their core audience. The challenge lies in consistently identifying and curating such events to provide a steady stream of engaging markets, moving beyond the reliance on singular, massive political events.
Challenges and Opportunities: What’s Next for **Polymarket** and **Kalshi**?
The user exodus post-election highlights the inherent challenges in scaling prediction market models to rival mainstream applications. However, it also brings into focus crucial opportunities for growth and diversification.
Challenges:
- Sustaining Casual User Engagement: Converting temporary users from high-profile events into a consistent user base remains a significant hurdle.
- Scalability Issues: Prediction markets lack the broad appeal of general-interest platforms, making it difficult to achieve TikTok-level DAUs consistently.
- Regulatory Uncertainty: The ‘gray area’ regulatory status in the U.S. and EU creates operational complexities and limits potential expansion, especially for Polymarket.
- Competition: As traditional bookmakers increasingly eye the prediction market space, Polymarket and Kalshi need to sharpen their competitive edge.
Opportunities:
- Diversification of Offerings: Kalshi has seen success in sports betting and entertainment wagers, indicating potential beyond traditional political or financial markets. Expanding into areas like corporate earnings predictions or commodity price fluctuations could create more consistent, smaller-scale offerings.
- Technological Innovation: Polymarket, with its blockchain-based foundation, is exploring the launch of a cryptocurrency to incentivize engagement. This could attract tech-savvy users seeking alternatives to legacy financial systems and leverage the inherent transparency and speed of decentralized platforms.
- Bespoke Data Services: Both platforms are reportedly in talks with major companies to provide bespoke data. This move could stabilize revenue streams independent of fluctuating user growth, leveraging their unique datasets.
- Global Expansion: Polymarket, currently restricted in the U.S., has a significant opportunity for growth if it can navigate regulatory pathways to expand its reach.
For long-term success, Polymarket and Kalshi must strategically balance the allure of high-profile, volatile events with the development of a robust portfolio of consistent, smaller-scale markets. By focusing on niche expertise, technological innovation, and potentially new revenue streams like data provision, these platforms can redefine their role in the financial and information ecosystem.
Conclusion
The post-election decline in **DAUs** for Polymarket and Kalshi is a stark reminder of the volatility inherent in speculative platforms driven by major events. While the 2024 election provided an unprecedented surge, sustaining that momentum requires more than just political cycles. The challenge for these prediction markets now lies in transforming temporary hype into lasting engagement. However, the consistent activity around other event-driven wagers, coupled with strategic moves into new market segments and technological innovation like a potential crypto launch, signals a resilient future. By adapting their strategies to cultivate a diverse range of offerings and leverage their unique positions, Polymarket and Kalshi have the potential to not just survive but thrive, carving out a permanent and impactful niche in the evolving landscape of information and finance.
Frequently Asked Questions (FAQs)
1. What are prediction markets?
Prediction markets are platforms where users can bet on the outcome of future events, such as elections, economic indicators, or pop culture events. Participants trade shares that represent the probability of an event occurring, with prices reflecting the collective belief of the market. These markets are often seen as a real-time gauge of public sentiment and future probabilities.
2. Why did Polymarket and Kalshi see a surge in 2024?
Polymarket and Kalshi experienced an unprecedented surge in daily active users (DAUs) and downloads during the 2024 U.S. presidential election. This was primarily due to the high public interest and intense speculation surrounding the election outcome, which drove a massive influx of casual users seeking to participate in or profit from political predictions.
3. What caused the decline in DAUs for these platforms?
The significant decline in DAUs for Polymarket and Kalshi after the 2024 election was largely due to the end of the high-attention event that initially drew in many users. Many were likely ‘casual’ users interested primarily in the election, rather than long-term participants. The inherent niche appeal of prediction markets, coupled with regulatory uncertainties, also contributed to the post-surge attrition.
4. How are Polymarket and Kalshi planning to recover user engagement?
Both platforms are exploring diversification strategies. Polymarket is considering launching a cryptocurrency to incentivize engagement and is looking into expanding its services to U.S. customers. Kalshi is focusing on expanding into sports betting and entertainment-related wagers. Both are also in discussions to provide bespoke data services to major companies, aiming to stabilize revenue streams independent of user growth.
5. Are prediction markets legal in the U.S.?
The legality of prediction markets in the U.S. remains a complex and often ‘gray area.’ Kalshi operates as a regulated exchange under the Commodity Futures Trading Commission (CFTC). Polymarket, however, is currently barred from serving U.S. customers due to regulatory restrictions. The regulatory landscape is evolving, and platforms often face scrutiny regarding whether they constitute gambling or legitimate financial instruments.
6. What are the future prospects for prediction markets?
Despite the recent user decline, prediction markets show potential for long-term sustainability. They continue to see activity around other high-attention events like the papal conclave or major sports events. Future success hinges on diversifying offerings beyond major elections, leveraging technological innovations (like blockchain), and potentially securing stable revenue through data services or new market segments like corporate earnings predictions. The ability to differentiate from traditional bookmakers through speed, transparency, and niche expertise will be key.
