Luana Lopes Lara isn’t a pop star. She didn’t launch a fashion brand. And she didn’t build a viral app.

Instead, she built a financial market for betting on the future.

The 29-year-old Brazilian co-founder of prediction market Kalshi just became the youngest self-made female billionaire on Earth (beating Taylor Swift, who previously held the title).

Kalshi is the first federally regulated predictions exchange where users can trade “yes” or “no” contracts on real-world events. Think of it like the stock market—but instead of trading companies, you’re trading on outcomes.

Beyond the most popular categories—sports and elections—prediction market creators can ask questions like:

• “Will a stock go up or down?”
• “Who will be the new CEO of XYZ company?”
• “When will a new product be announced?”
• “What cities will Waymo launch in?”

If the event happens, the contract pays $1. If not, it pays $0. Prices float between those two points—giving you a real-time odds board backed by actual money.

Kalshi was recently valued at $11 billion after raising a fresh $1 billion. That pushed Lara’s 12% stake to an estimated $1.3 billion.

Not bad for a former ballerina who once trained at Brazil’s Bolshoi Theatre.

But this isn’t just a wonderful story about wealth creation. It’s about a new kind of market that’s going mainstream… fast.

• Prediction markets are finally having their day in the sun.

For years, prediction markets were treated as curiosities—too small, too niche, and too risky to be taken seriously by professional traders.

Not anymore.

Prediction markets are exploding. Weekly volume recently hit $3 billion, up 10X from last year.

And the two most important platforms—Kalshi and Polymarket—are in a tight race. Both hit over $1 billion in volume in recent weeks:

Source: Dune Analytics

Here’s how they work.

To list a prediction market, its maker must state a bet. For example: “Will bitcoin go above $120,000 this year?”

Then people can bet “yes” or “no.”

The cost of each bet is based on the current odds. If the odds say 80%, then the “yes” contract costs 80 cents. If you’re right, you get a dollar.

For bettors, the biggest opportunity to make money comes from placing a large bet when you know the prevailing wisdom—what the current odds are showing—isn’t being properly valued.

This isn’t just gambling. By combining the knowledge of a huge number of individuals who, by themselves, only possess partial information, the answer to most questions can be found with surprising accuracy.

In the 2024 presidential election, Polymarket predicted state-by-state winners with 95% accuracy hours before the Associated Press called them.

And with Kalshi now getting the green light from US regulators, prediction markets are becoming a legitimate part of our financial infrastructure.

• Crypto helps supercharge prediction markets even more…

Prediction markets have seen massive growth lately.

Kalshi’s open bets grew from $32 million to an all-time high of $319 million this year. And Polymarket more than doubled from $111 million to $223 million in just two months.

To grow this quickly, a prediction market requires a high degree of trust. If your rules aren’t obvious or people suspect they aren’t being followed, a prediction market will fail.

That’s where crypto comes in.

The decentralized protocols of a blockchain are ideally suited for prediction markets. Users can verify outcomes and inspect the underlying code, giving them full transparency into what they’re betting on and how each market will be resolved.

Crypto is also a great fit for expanding access to prediction markets, as it allows for global reach and engagement. More reach = more engagement = more growth.

Blockchain technology also gives prediction markets excellent composability. Composability means that, by design, they can be flexibly integrated almost anywhere.

With high composability, prediction markets aren’t confined to a single website. They can appear in your X feed, alongside a video, or embedded directly in, say, The New York Times website.

Greater composability expands the reach of prediction markets, creating new revenue streams for content creators who host these markets and new forms of engagement for audiences around topics they care about.

This is the “unlock” prediction markets have been waiting for—and thanks to crypto, they finally have the key to grow at scale.

• Where is this all headed?

When Luana Lopes Lara co-founded Kalshi, her pitch was simple: “Why can’t we trade the event itself?”

Why should you have to buy options on the S&P just to express a view on inflation?

Why not just bet directly on inflation?

That’s the future Kalshi is building. A world where real-world expectations become tradeable.

Kalshi’s regulatory approval gave it the green light to go mainstream. Crypto provides the missing piece—global, verifiable infrastructure—that will help transform prediction markets from a niche concept into a new kind of investment vehicle.

There’s no guarantee as to how prediction markets will play out.

But given how valuable their information can be—and how their increasing integration with crypto is helping to drive their growth—I expect we’ll see a lot more of them soon.

Crypto isn’t just for speculation anymore. From prediction markets to stablecoins to tokenized stocks, we’re tracking the projects where crypto meets real-world utility.

This is one of the core trends I discuss in my free letter, The Jolt. If you’d like to sign up, you can join me here (it’s free).

______________

Stephen McBride is Chief Analyst, RiskHedge. To get more ideas like this sent straight to your inbox every Monday and Friday, make sure to sign up for The Jolt, a free investment letter focused on profiting from disruption.