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Prediction markets had a high-velocity week: volumes kept climbing, regulators got louder, and liquidity became the central story. The biggest headline came from Rain Foundation, whose $100 million injection into its prediction markets protocol sent RAIN to a new all-time high and pushed the platform into the top tier by TVL.
Hyperliquid has entered prediction markets in its usual uncompromising style. On May 25, the decentralized derivatives exchange activated HIP-4, bringing native outcome markets to its mainnet.
Traders continued piling into politics and sports, especially 2028 election markets and the 2026 FIFA World Cup, while platforms raced to deepen liquidity and court institutional capital.
At the same time, the sector faced sharper regulatory pressure, from Spain blocking Polymarket and Kalshi to US gaming interests warning of lost tax revenue.
The tone heading into next week is bullish but tense: prediction markets are growing fast, but the bigger they get, the harder regulators are pushing back.
Rain Foundation announced on May 27 that it injected $100 million into the Rain Prediction Markets Protocol, with the funds sent directly to a smart contract.
Following the announcement, the RAIN token surged 44% within hours to a new all-time high of $0.01195. The foundation said the injection pushed the protocol’s TVL to the third-largest globally among prediction markets ahead of the FIFA World Cup.
Rain has officially entered the global Top 3 for prediction market TVL, trailing only @Polymarket and @Kalshi, following a massive $100M liquidity injection by the Rain Foundation ahead of the World Cup.
The allocation consists of $50M in USDT and $50M in $RAIN, flowing directly… pic.twitter.com/Ikd0nfQ4y1
— Rain (@Rain__Protocol) May 26, 2026
The funding includes $50 million in USDT and $50 million in RAIN tokens. The capital is intended to improve liquidity, deepen trading markets, narrow spreads, and support higher trading volumes. The move could help solve long-standing liquidity and slippage issues that have limited decentralized prediction platforms.
RAIN’s circulating supply currently exceeds 62.26 billion tokens, with a maximum supply of 1.15 trillion. Critics argue the large supply creates inflation concerns unless stronger token-burning mechanisms are implemented.
Supporters counter that the protocol already includes a burn mechanism designed to reduce supply over time, although Rain Foundation has yet to release official data on burn rates or tokens removed from circulation.
The American Gaming Association estimates states have lost more than $1 billion in tax revenue due to the rise of prediction markets, which CEO Bill Miller described as “backdoor sports betting.”
Miller argued that platforms are operating like national sportsbooks without sufficient oversight from the Commodity Futures Trading Commission (CFTC).
States and tribal operators say the lost tax revenue impacts funding for community projects and Native American casinos. While several states have sued prediction market platforms over sports-related contracts, the CFTC has defended its authority to regulate them as derivatives markets.
Prediction platforms argue they serve broader economic purposes beyond gambling, including markets tied to politics and macroeconomic events. However, Miller said the majority of trading activity still comes from sports-related contracts, undermining those claims.
Prediction markets continue to attract massive trading activity across politics and sports, with several contracts already surpassing hundreds of millions, and even billions, in volume as traders position around major global events and election cycles:
Prediction market platforms continue to expand rapidly, but the sector is now facing both accelerating institutional adoption and mounting global regulatory pressure.
Prediction markets continued their rapid expansion in 2026, with combined monthly trading volume across Polymarket, Polymarket US, and Kalshi surpassing $20 billion in May, according to latest data. Cumulative volume across the platforms has now exceeded $170 billion.
Polymarket remained the leading crypto-native platform, with monthly active traders consistently above 600,000 and peaking near 750,000 in March 2026. The platform also saw new market creation surge from under 10,000 monthly markets in mid-2025 to more than 450,000 by May 2026.
Open interest on Polymarket climbed from roughly $150 million in early 2025 to nearly $600 million by April 2026. Kalshi’s daily open interest also rebounded strongly, approaching $200 million after post-election declines.
Kalshi emerged as the largest regulated prediction market by trading volume, with monthly volume rising from under $1 billion in May 2025 to nearly $15 billion by April 2026.
Politics remained the dominant category, particularly around US elections, Fed policy, and geopolitics, while crypto markets tied to Bitcoin, ETFs, memecoins, and AI tokens also generated strong activity. Sports-related prediction trading increased ahead of major events like the FIFA World Cup and NBA Finals.
Sporttrade will exit the US sports betting market next week as it shifts toward prediction markets.
The Philadelphia-based betting exchange will stop wagering in all five states where it operates on May 25, with full platform access ending by June 26.
New Jersey users must withdraw funds by May 25, while customers in Arizona, Colorado, Iowa, and Virginia have until June 25. Sporttrade submitted applications to the CFTC in February to become a Designated Contract Market and Derivatives Clearing Organization.
CEO Alex Kane said the move opens a new chapter for the company, citing the CFTC’s framework as offering greater efficiency, transparency, and consumer protection. Sporttrade first launched in New Jersey in 2022 before expanding to Colorado, Iowa, Arizona, and Virginia.
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