The financialization of the future

Why Barnard students should be wary of betting on politics, policy, and human crisis through Kalshi.

Photo by Sophie Merittt & Haley Scull/The Barnard Bulletin

By Pai Sinpatanasakul May 6, 2026

Walk into the Milstein Center or Joe Coffee, and you will hear the same hum of finance recruiting and coffee chats. For those of us in economics, the conversation usually revolves around internship cycles or the latest Fed rate hike. But this semester, a new term has entered the campus lexicon: Kalshi. 

Kalshi, once a niche platform for hedging macro-risks, has exploded into a billion-dollar trading platform. Scroll through Kalshi, and you will see contracts on interest rate cuts, government shutdowns, and election outcomes. Each contract trades like a price: 63 cents if the market thinks there is a 63 percent chance of the outcome. 

On April 20, Kalshi’s weekly trading volume hit a staggering $3.91 billion. For some, it is a revolutionary platform that aggregates the wisdom of the crowd. But for those of us watching from Broadway, just a subway ride away from the Southern District of New York (SDNY), it looks less like a breakthrough in market efficiency and more like a high-stakes casino for everything.

Economists from Friedrich Hayek to Eugene Fama have argued that markets excel at processing decentralized knowledge. Hayek’s insight that no central planner can match the informational efficiency of prices now extends beyond goods and securities into the future itself.

Financialization refers to the rising influence of financial markets, stakeholders, and motives on the economy. The rise of Kalshi is a prime example of this growing financialization. However, it has come with its own set of challenges.

Last month’s legal developments have catapulted prediction markets into a new, unregulated frontier. On April 6, the Third Circuit Court of Appeals handed Kalshi a massive victory, ruling that its event contracts — even those involving sports — are “swaps” under federal oversight rather than “gambling” subject to state law.

By rebranding bets as derivatives, Kalshi has essentially achieved a regulatory loophole. It has effectively bypassed the consumer protections that govern traditional sportsbooks. While the Sixth Circuit is still allowing some states to fight back, it is clear that we are moving toward a world where every outcome, from a Senate bill’s passage to the winner of the Ivy League tournament, is a tradeable asset.

As a student on the political economy track, I am taught that markets are the ultimate information aggregators. The theory is seemingly logical: if you have “skin in the game,” you are more likely to provide an honest prediction.

However, the reality is increasingly messy. On April 23, the SDNY brought a first-of-its-kind insider trading case against a U.S. soldier for trading on classified information via prediction markets. When we turn the future into a speculative market, it is possible for us to invite corruption. We risk creating a world where individuals have a financial incentive to see catastrophic events, like climate disasters or geopolitical conflicts, actually occur.

At Barnard and Columbia, we pride ourselves on being at the intersection of theory and practice. Many of us will go on to work in the very institutions currently debating the ethics of these markets. But we have to ask ourselves: what does it mean to financialize our social lives?

When 90 percent of a platform’s volume is driven by sports betting, the argument for “economic hedging” starts to feel performative, and more like betting on the future. 

At its most optimistic, Kalshi is an experiment in applied economic theory — a real-world test of whether markets can aggregate knowledge about the future. At its most cynical, it is another step in the expansion of financial logic into domains that were once governed by ethics, politics, and social responsibility. At Barnard, where we are taught to question systems of power and think critically about structures, that expansion deserves scrutiny.