Clear Street and Marex Group are preparing to provide institutional clients with access to Kalshi's prediction markets, as growing demand from hedge funds drives Wall Street's expansion into event-based trading contracts, according to Bloomberg.

Clear Street expects to begin clearing Kalshi trades in late March, while Marex plans to introduce access within the following months. Both firms are responding to growing institutional interest in prediction markets, which allow investors to trade contracts linked to the outcomes of economic, political and other real-world events.

Thomas Texier, global head of clearing at Marex, said large hedge funds have approached the firm seeking access to the markets. Marex is also exploring the use of prediction contracts to hedge its own exposures, suggesting potential applications beyond speculative trading.

Kalshi chief executive Tarek Mansour expects institutional participation to accelerate throughout 2026, highlighting the growing use of prediction market data by major financial news organisations. The platform is positioning its event contracts as both sources of forward-looking market information and instruments for managing investment risk.

However, regulatory uncertainty remains a significant obstacle to broader institutional adoption. US state regulators have challenged prediction market operators over gambling laws, while concerns about insider trading and the regulatory treatment of event contracts have prompted calls for clearer oversight.

The Commodity Futures Trading Commission has asserted primary jurisdiction over prediction markets, although the Securities and Exchange Commission has also indicated an interest in the sector. Executives from Nasdaq and CME Group have called for greater regulatory clarity to support institutional participation.

The entry of established prime brokers could significantly expand hedge fund access to prediction markets, allowing institutional investors to incorporate event-driven contracts into existing trading and risk management strategies.