Market Maker Dominance at Kalshi Fuels Liquidity Debate

Kalshi's crypto perpetual futures market has been scrutinized for its unusually high trading volume, but the exchange claims that much of this activity can be attributed to a single market maker.

A review of Kalshi's public trade records from September 17 through September 20 found that recurring trades valued within $2 of $5,499 accounted for approximately 57% of sampled transactions in ether perpetual futures. In Bitcoin, similar patterns emerged with recurring trades of roughly $2,500 and $5,000 representing 54% of the examined value.

Kalshi attributes these concentrated trade sizes to a market maker posting fixed-size orders under an incentive program that pays firms for maintaining bids and offers within specified size and price requirements. According to the exchange, hundreds of distinct traders took the other side of those quotes, often at a disadvantage as prices moved elsewhere.

The analysis suggests that the high volume may not be indicative of liquidity, but rather rapid recycling of exposure. Kalshi's systems prevent participants from matching against themselves and monitor for coordinated trading, with no evidence found to support allegations of collusion or wash trading.