Kalshi Eyes Institutional Scale as Prediction Markets Prove Fed-Grade Forecasting Value

Kalshi is making a bold case that prediction markets are not just a niche experiment—they are becoming institutional-grade tools for forecasting and risk management. In this interview from the FIA International Derivatives Expo 2026 in London, Andy Ross, Kalshi’s Head of Institutional, explains why the next evolution of markets may not replace futures—but expand what markets can do. Ross highlights a key differentiator: accuracy. Using the Brier score, a measure of probabilistic forecasting, Kalshi’s markets show striking precision—around 0.05 one month out for actively traded contracts. That level of calibration has drawn attention from the Federal Reserve, which has publicly acknowledged Kalshi’s data in areas like CPI and interest rate expectations and is exploring ways to incorporate it into its analytical frameworks. But the real story is in the use cases. Kalshi is enabling hedging in areas where no market previously existed. One example: a California solar tax credit contract that allowed institutions to transfer $600,000 in risk into a transparent, centrally cleared market. Another: a sports bar hedging a Knicks promotion to convert uncertain costs into fixed exposure. These examples point to a broader shift—turning previously unhedgeable risks into tradable instruments. Ross also explains how Kalshi designs its contracts to reduce manipulation and ambiguity. From Bitcoin markets using multi-exchange TWAP pricing to clearly defined resolution rules for unexpected events, the focus is on transparency and fairness. Even edge cases—such as the death of a contract subject—are addressed up front to avoid perverse incentives. Regarding the broader market structure, Ross positions prediction markets alongside futures and perpetuals rather than in competition. Futures remain dominant for standardized hedging, while prediction markets specialize in event-driven outcomes. Meanwhile, the push to bring perpetual futures onshore could reshape access to trillions in offshore trading volume. Looking ahead, Kalshi aims to become a recognized institutional exchange, on par with CME or ICE, while maintaining its accessibility for retail users. The long-term vision: a market ecosystem with greater transparency, more precise risk pricing, and entirely new categories of hedging. 1. What is the most valuable use case for prediction markets? 2. How have you adapted to accommodate institutional volume? 3. How has public skepticism and industry criticism, from figures like John Lothian, shaped your growth? 4. Do prediction perpetuals and traditional futures complement or compete with each other? 5. Are you adjusting your market microstructure to handle larger institutional trade sizes? 6. Where will Kalshi be in five years? 7. What advice do you have for young people entering the industry? YouTube Chapters: 00:00 The Value of Kalshi's Data 01:25 Prediction Market Use Cases 03:33 Institutional Adaptation 05:35 Industry Criticism and Growth 07:44 Perpetuals vs. Futures 10:02 Microstructure and Liquidity 11:03 Future Outlook for Kalshi 11:58 Advice for Young Professionals