📊 $20B crypto exchange declares war on Kalshi and Polymarket

GM. This is PredictionDesk - your daily briefing on prediction markets.

Hope you survived the holiday chaos. We didn't take a day off. Neither did the news.

Here's what we got for you today:

• 🐙 Leading crypto exchange Kraken announces prediction markets in 2026

• 🪙 Silver hits ATH while BTC and ETH flatline (Peter Schiff was right?)

• 🏃 Crypto.com retreats from 9 states

• 🏈 Kalshi goes full mainstream this Christmas

Let's get into it.

The buzz around Kraken joining the prediction markets race sounds clean in press clips but the underlying reality is layered.

What’s happening:
Kraken’s leadership has publicly stated the exchange will roll out prediction markets in 2026 as part of a broader expansion strategy into new asset classes alongside tokenization and an eventual U.S. IPO. (CNBC, Dec 24)

Behind that headline move:

• Kraken spent $100M to buy The Small Exchange, a CFTC-licensed designated contract market, which sets up the regulated infrastructure needed to offer event contracts and similar derivatives. (CoinNews, Oct 16) 

Why it matters:
This isn’t plug-and-play. Prediction markets require licensed infrastructure, and Kraken’s move shows crypto firms are buying compliance to compete with Kalshi, Polymarket, and sportsbooks. 

Reality check:

• Prediction markets in the U.S. still run into gray areas between gaming and derivatives rules. Regulatory clarity isn’t settled. 

• Kraken’s approach to buy regulated infrastructure acknowledges that you can’t just flip a switch and start event contracts without navigating the legal framework first.

• Even with federal CFTC oversight possible, state regimes and gaming boards can push back or reinterpret contracts as wagering.

The takeaway:

Kraken’s prediction market is a strategic build-out that faces real regulatory and technical hurdles. That mirrors the broader reality for anyone thinking U.S. prediction markets are easy to launch, far from the truth.

SILVER HITS NEW ALL-TIME HIGH WHILE CRYPTO BLEEDS 🪙 

Precious metals are having their moment.

Anti-crypto crusader Peter Schiff is calling for a "historic economic collapse" and the charts are backing him up. Silver just ripped to $75 for the first time in history, while our crypto portfolios are down for the year. 

The scoreboard:

• BTC: Down 10% over the past year

• ETH: Down 14% over the past year

• Silver: Up to all-time highs at $75

And prediction markets are pricing it in. The "First to 5k: Gold or ETH?" market is sitting at 72% for gold. Translation: The market thinks precious metals are going to lap crypto in this race.

Why it matters:

This is the narrative flip that nobody wanted to talk about during the bull run. When macro gets weird, old-school assets start looking less boomer and more like the smart play.

Schiff has been wrong before. A lot. But broken clocks and all that.

The crypto response:

If you still want exposure to gold without leaving the blockchain, tokenized gold exists. Paxos' PAXG is the most established option - it's backed 1:1 by physical gold held in London vaults. Other alternatives include Tether Gold (XAUt) and various DeFi-wrapped versions.

It's not the same as holding silver bars in your basement. But it beats watching ETH bleed while Peter Schiff tweets.

The vibes have officially shifted.

CRYPTO.COM IS PLAYING DEFENSE IN 9 STATES 🏃

The prediction market expansion isn't as smooth as the press releases make it sound.

Multiple reports confirm Crypto.com has stopped offering sports event contracts in 8-9 states, citing regulatory pushback. (SBC Americas, Dec 16)

The states are treating "event contracts" like unlicensed sports betting, even when they're packaged differently.

Why it matters:

This is the reality check for anyone who thinks launching a prediction market in the U.S. is a single launch.

It's not. It's 50 separate fights.

State-by-state friction is a real constraint on distribution. Even as demand grows, the regulatory patchwork keeps getting messier.

FanDuel, DraftKings, Kalshi, Crypto.com - they're all navigating the same maze. And it's not getting simpler anytime soon.

KALSHI IS EVERYWHERE THIS CHRISTMAS 🏈

Speaking of distribution...

The New York Post ran a Kalshi promo tied to Christmas Day NFL game markets. (New York Post, Dec 25)

Not the deepest tech story. But it's a signal.

Kalshi is buying attention from mainstream sports-betting audiences - not just prediction market nerds. They're competing for the same eyeballs as DraftKings and FanDuel.

Translation: The prediction market space is no longer a niche curiosity. It's fighting for the same real estate as the sportsbooks.

Christmas Day NFL + promos = a natural on-ramp moment. Expect more of this.

MARKET MOVES 📈

ODDS & ENDS 📊

• Polymarket whale lost $200K misreading settlement rules, price manipulation failed. (Polymarket)

• Trust Wallet extension bug cost $7M; users safe, upgrade immediately. (Trust Wallet, Dec 25)

• Caroline Ellison out early; cooperation works, SBF still faces decades. (Cointelegraph, Dec 25; Business Insider, Dec 2025)

MEMES OF THE DAY 😂

— @AutismCapital

The vibes remain immaculate.

THAT'S A WRAP 🎬

Day three in the books.

Hope your Christmas was better than a Polymarket login vulnerability.

Tomorrow we're back with more markets, more moves, and hopefully fewer security breaches.

If you made it this far - thanks for being here. Forward this to a friend who needs to know about prediction markets.

See you tomorrow.

The PredictionDesk Team.