Prediction Markets Surge as Polymarket Upgrades and Kalshi Wins Appeal

Polymarket replaces bridged collateral and rebuilds trading engine

Polymarket said its April 6 upgrade was its largest infrastructure change since launch. The platform introduced Polymarket USD, replacing bridged USDC.e as collateral across all prediction markets, and launched CTF Exchange V2, a rebuilt engine designed to reduce gas costs, speed order matching, support EIP-1271 signatures for smart contract wallets and account abstraction, add builder codes for onchain order attribution, and improve fee collection and distribution logic.

Polymarket said the new collateral token gives the platform direct control over the rails supporting its outcome tokens and removes dependence on Polygon’s bridged USDC.e. The company described Polymarket USD as a wrapped stablecoin built for the platform, backed 1:1 by USDC and issued directly by Polymarket. Users holding USDC or USDC.e on the platform will have funds wrapped automatically through the frontend after a one-time approval, while power users operating outside the frontend will need to call the wrap() function on the Collateral Onramp contract.

The platform said most users will not need to do anything beyond approving the wrap prompt, but API traders, bot operators and developers will need to update to the latest CLOB-Client SDK in Typescript, Python and Go. Updated documentation and code examples were still in progress, and Polymarket said all open orders would be canceled during a short maintenance window. The company also said the transition would affect API traders and bot operators within two to three weeks.

Polymarket also drew a distinction between the infrastructure rollout and any future token distribution. The platform said Polymarket USD is a collateral change, while a POLY governance token airdrop confirmed by its CMO in October 2025 remains separate and pending a full U.S. relaunch. “The two developments are separate,” the article said. “Polymarket USD is a collateral infrastructure change. POLY, if and when it launches, would serve a governance or utility function.”

Kalshi ruling narrows New Jersey’s reach

Kalshi won a legal victory on April 6 when the U.S. Court of Appeals for the Third Circuit ruled 2-1 that New Jersey gaming regulators cannot block the company from offering sports event contracts in the state. The ruling said New Jersey does not have explicit authority over those contracts, marking a win for prediction markets as lawmakers and regulators scrutinize the sector more closely.

One judge dissented and described Kalshi’s conduct as a “performative sleight meant to obscure the reality that Kalshi’s products are sports gambling.” That dissent underscored the legal tension around event contracts even as the majority ruling limited New Jersey’s ability to use state gambling law to shut the platform down.

Macro traders are watching prediction markets more closely

Sygnum Bank chief investment officer Fabian Dori said prediction markets are becoming more useful to professional crypto desks during periods of geopolitical stress. He suggested that platforms such as Polymarket and Kalshi repriced the odds of U.S. escalation in the Iran conflict in real time as President Donald Trump paired new threats with signals of possible negotiations on Sunday, while Bitcoin rose more than 3.5% on Monday.

“Prediction markets price discrete, named outcomes with real capital behind them,” Dori said. “For crypto in particular, where so much price action is driven by specific binary events, regulatory decisions, geopolitical developments [and] protocol upgrades, that is a categorically different signal.”

Dori said prediction market odds on de-escalation shifted before mainstream financial media coverage caught up and “had direct correlation” with Bitcoin price. He also said some professional desks now use prediction markets as real-time event monitors alongside funding rates, options surfaces and flows. For example, ARK Invest is integrating Kalshi’s prediction market data into its investment process as an example of event odds moving into institutional workflows.

Dori said prediction markets in a regulated environment function as a context layer that helps teams frame risk scenarios rather than serving as direct buy-or-sell signals. His comments came as prediction market activity, platform upgrades and legal developments all converged on the same day, adding to signs that the category is gaining a larger role in trading and risk management.