Trump Administration Backs Prediction Markets, “Will Protect Them Directly Instead of the SEC”

▲ Prediction markets, U.S. election/ChatGPT-generated image

The Donald Trump administration has officially expressed support for election prediction markets such as Kalshi and Polymarket, signaling the dawn of a new data economy era that combines digital assets and predictive finance.

According to cryptocurrency media outlet Bitcoinist on February 20 (local time), the Trump administration has defended the operational rights of prediction market platforms Kalshi and Polymarket, making clear its stance on easing federal regulatory oversight. The administration believes that these markets serve the public interest by reflecting public sentiment more accurately than traditional opinion polls and has pledged legal support accordingly.

Unlike the Commodity Futures Trading Commission’s previous attempts to ban election prediction markets by classifying them as gambling, the current administration appears to recognize them as legitimate derivatives markets. Polymarket, in particular, drew global attention during the last presidential election by recording billions of dollars in trading volume, leveraging Bitcoin (BTC) and a staking-based financial system. The government views the real-time data generated by these markets as a valuable indicator for policymaking.

Greater regulatory clarity is expected to act as a catalyst for industry growth. Following the Trump administration’s declaration of support, Polymarket’s daily active users and open interest have remained at record highs, while institutional participation is accelerating. This development is seen as a significant milestone symbolizing the institutional integration of the digital asset ecosystem, in line with the U.S. cryptocurrency market structure bill (CLARITY).

The expansion of prediction markets is expected to go beyond forecasting election outcomes to encompass a wide range of areas, including economic indicators and corporate earnings. Experts analyze that the government’s pro-innovation stance will encourage the emergence of innovative financial products and strengthen the United States’ leadership in digital finance. As Bitcoin prices react sensitively to macroeconomic indicators, data from prediction markets are providing investors with more sophisticated insights.

This decision reflects President Trump’s willingness to embrace technological innovation, moving away from the regulatory-heavy policies of previous administrations. With a legal foundation now in place for prediction markets to operate stably within the institutional framework, the pace of liquidity provision and ecosystem expansion in the cryptocurrency market is expected to accelerate further.

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