Kalshi’s Bitcoin and Ether Perps Switched Trade Sizes in Sync. What’s Going On?

Fixed-size trades made up around half of Kalshi’s bitcoin perp volume, and three times they changed size within minutes of the ether market. Kalshi says it knows who is behind these trades but will not reveal their names. Gambling Insider investigates.

After The Wall Street Journal reported on a $5 billion flurry of nearly identical trades in Kalshi’s ether perpetual futures, or perps, in September, Kalshi said in a blog post defending its perps volume that fast traders were picking off a market maker’s stale quotes.

But an analysis of Kalshi’s public trading record by Gambling Insider found that the traders taking those trades did no better than chance.

Gambling Insider can now reveal that Kalshi’s bitcoin perp shows the same pattern, and that its fixed trade sizes changed alongside ether’s.

At 11:07 p.m. ET on Aug. 23, the trade size that dominated Kalshi’s ether perp changed. In the same minute, the trade sizes dominating its bitcoin perp also changed.

Gambling Insider’s analysis of Kalshi’s public trade data shows that three times in August and September, the fixed trade sizes in the two contracts changed within 10 minutes of each other.

Over those two months, $10.17 billion of the bitcoin perp’s $19.68 billion in notional value, or 52%, traded at a handful of fixed sizes, the same pattern that drew scrutiny to Kalshi’s ether perp in September.

The matched timing raises a question Kalshi can answer but will not: whether the same participants are behind the fixed-size trades in both contracts.

As a federally regulated exchange, Kalshi knows the participants behind every trade. But we do not comment on individual trader activity,” Elisabeth Diana, Kalshi’s head of communications, said in an Oct. 20 email to Gambling Insider.

Kalshi confirmed to Gambling Insider that its volume incentive program, which would have paid traders according to how much they traded, was not live. 

However, three other perps incentive programs are live, and Kalshi has posted no public notice that any of them started, though its filings say each takes effect “upon exchange notice.” It did not respond to follow-up questions.

The Commodity Futures Trading Commission (CFTC), which regulates Kalshi, did not respond to a request for comment.

Bitcoin and Ether Trade Sizes Moved Together

Perps track the price of an asset such as bitcoin without ever expiring. On most exchanges, trades come in every size. On Kalshi, most money changed hands at a few exact amounts.

The dominant ether size moved from $5,500 to $5,425 at 11:58 p.m. ET on Sept. 20, two days before The Wall Street Journal reported on the trades, and to $4,025 at 11:25 p.m. ET on Sept. 24. The trading has not stopped. From Oct. 1 to Oct. 18, trades within $50 of $4,025 made up 63% of the ether perp’s notional value.

The bitcoin perp ran its own fixed sizes, often two at a time, such as $5,000 and $2,500. They changed in the same minute as ether on Aug. 23, within 10 minutes of ether around midnight on Aug. 9, and within minutes of 11:25 p.m. ET on Sept. 24. Ether’s size also changed twice, on Aug. 18 and Sept. 20, without a matching change in bitcoin.

Chart 1: Three times, Kalshi’s bitcoin and ether perps changed their fixed trade sizes within 10 minutes of each other.

Bitcoin Takers Did No Better Than Chance

In the same Sept. 22 blog post, Kalshi said the fixed sizes are “entirely consistent with a single maker putting up resting orders of a fixed size,” and that faster traders win those trades with “even a small latency advantage.” Trading with yourself, it said, “is mechanically blocked on Kalshi.” A single market maker quoting both contracts could change both sizes at once.

That account implies the takers were profiting from stale prices. Yet the bitcoin trades fail the same test that the ether trades failed.

Compared with Binance’s second-by-second bitcoin prices, allowing up to a second of timing error, bitcoin’s fixed-size takers got a better price than the wider market implied on 36.7% of trades. A coin flip would have done so 35.1% of the time. Other bitcoin takers beat the market on 44.1% of trades, versus a 36.6% chance.

Experts Point to Market Makers

Andre Guettler, a finance professor at Ulm University who has tracked the trades independently, said the synchronized changes point to market makers’ automated systems.

Market makers seem to apply similar bots to increase liquidity and artificial volume,” he said. “The same moment moves further support a critical conclusion that volume is being artificially upward biased.”

“It’s not retail that’s driving the fixed-size volume but market makers that bring the liquidity (and probably also artificially increase volume; the low open interest to volume ratio further supports this interpretation),” Guettler said.

Professor Rajiv Sethi, a Barnard College economist whose September analysis of the volume backed a version of Kalshi’s explanation, told Gambling Insider after seeing its ether analysis that he was “starting to have doubts about my tolerated sniping explanation.” He now says Kalshi holds the data to end the argument.

The issue could be settled decisively if we knew the answers to two questions: do the two main market makers ever trade against each other, and what proportion of their total volume comes from passive orders,” he said. “It would be very helpful if Kalshi could disclose this.”

Sethi added that he could imagine explanations “that involve neither wash trading nor tolerated sniping, but these involve aggressive orders by at least one of the market makers.” An aggressive order trades immediately against orders already waiting on the book.

Arash Aloosh, an assistant professor of finance at DCU Business School, said earlier this month that the trades’ visibility “raises the question of why the traders appeared willing to attract such attention.”

He noted that their continuation “may suggest that the traders behind these transactions are similar or, at the very least, share similar interests or profiles.”

Kalshi Confirms Three Live Incentive Programs

Exchanges commonly pay incentives to attract trading and to reward market makers for keeping orders on the book. Gambling Insider examined Kalshi’s filings to see which incentives applied to its perps while fixed-size trading was underway.

Kalshi’s CFTC filings show at least eight incentive programs for perps traders. Diana gave the status of five:

• Live: the Temporary Perpetual Fee Rebate Program, filed June 24, which returns trading fees to self-clearing members, firms that clear their own trades.
• Live: Kalshi Klear’s Perpetual Interest Program, filed Aug. 14, which pays “the equivalent of 7% APY” on eligible positions, up to $7 million in total.
• Live: the Designated Liquidity Provider Market Making Program, which Diana said is the market-maker program described in Kalshi’s Sept. 22 blog post.
• Not live: the Volume Incentive Program, which an Aug. 4 filing applied to all Kalshi markets and which Kalshi filed to end on Sept. 28, effective no earlier than Oct. 13.
• Not live: the SCM Perpetual Deposit Program, filed July 23, which would also have paid the equivalent of 7% APY.

Kalshi gave no status for its perps referral program, filed July 24, or its Perpetuals Fee Consideration Program, filed June 4. An eighth, an FCM Perpetuals Fee Rebate Program filed Oct. 15, has yet to start.

The live interest program’s rate is unclear. The Klear filing says 7%, but Kalshi’s help page on perps margin accounts says, “The current rate is approximately 3.50% APY, subject to market conditions.” Kalshi didn’t say which rate applies, or why it filed to end a volume program it says wasn’t live.

The volume program is the only one of the eight whose filing splits a fixed reward among traders by their share of trading volume. But the live fee rebate makes heavy trading almost free for self-clearing members, and the market-maker program’s terms are confidential.

Without start dates for either, we can’t tell whether they began when fixed-size trading did, or whether the firms behind that trading received them.

Chart 2: Kalshi’s perps incentive programs and their status, according to Kalshi. Highlighted: the market-maker program Kalshi described in its Sept. 22 blog post.

Live Programs Started Without a Public Notice

The programs also have a transparency problem: Kalshi’s filings say when each program may start, but not when it actually did.

Most of Kalshi’s perps incentive filings, including those for the live fee rebate and interest programs, say each program takes effect “upon exchange notice” or, for the Klear program, “upon clearing house notice.” Kalshi’s public notices page carries dated implementation notices for its perps fee schedules. For the incentive programs, it holds only copies of the CFTC filings.

Kalshi’s rulebook says it sends notices to members by email as well as on its website, so members may have been told in ways the public cannot see.

An Aug. 12 CFTC staff advisory on incentive programs told prediction-market exchanges that they “must also make available to the Commission, market participants, and the public accurate and complete information” about such programs. The advisory says it “does not create new obligations.”

State gambling regulators set a clearer bar. For instance, Ohio’s rule on sportsbook promotions requires promotion rules that are “clear and unambiguous” and “available to patrons and the commission.” Futures exchanges commonly keep market-maker terms confidential, which CFTC rules allow.

Market Makers’ Terms Stay Confidential

The market-maker program is harder still to examine. An amendment to the program filed Oct. 14 keeps its spread, size and uptime requirements in a confidential appendix.

Among its changes, the amendment would “Expand the Eligible Markets to include Finance and Perpetuals,” effective no earlier than Oct. 28.

That suggests the program didn’t cover perps before then, even though Kalshi says it is live and is the program described in its Sept. 22 blog post. Kalshi did not say which filing covered payments to perps market makers before Oct. 28.

Under a Sept. 24 update to the fee rebate, self-clearing members get back their net fees for both taking and providing liquidity. An Oct. 15 amendment would trim it to 98% from Oct. 29.

If Kalshi’s perps market makers are self-clearing members, the aggressive orders Sethi describes would cost them almost nothing in fees. Kalshi did not say whether they are.

Rival Exchanges Show No Such Pattern

Whatever lies behind the fixed-size trading, the pattern sets Kalshi apart from other perps exchanges. Measured by each day’s single most-traded size, Kalshi’s ether perp put 56% of its notional value into one size in August and September, and its bitcoin perp 27%.

The bitcoin figure is about half the perp’s 52% fixed-size share because this measure counts only each day’s top size, while the bitcoin perp often traded two at once. 

Kaiko, a crypto market data company, found 1.6% to 3.8% for ether perps and 0.75% to 2.74% for bitcoin perps on Binance and Hyperliquid over the same period. On Polymarket, which opened perps trading on Sept. 3, the figure was 7.9% for ether and 6.4% for bitcoin through Oct. 18.

Chart 3: One trade size dominated Kalshi’s ether and bitcoin perps, but this pattern is not seen on other exchanges.

The two findings point to the same gap. If one firm set the fixed sizes in the bitcoin and ether perps, as Kalshi’s own account of “a single maker” would allow, that firm’s orders made up about half the notional value in each contract while the traders filling them showed no edge over the wider market.

The missing notices leave a similar blind spot. Without them, traders cannot tell which rewards are on offer or when they began; rival firms cannot see what market makers are paid to quote; and outsiders cannot judge how much of Kalshi’s perps volume reflects trader demand rather than exchange payments.

In September, Kalshi’s crypto lead told CoinDesk that, unlike offshore exchanges, Kalshi must file its incentive programs publicly, “so what you see is truly what you get.”

The public can see Kalshi’s perps filings. It cannot see which programs are paying out, how much market makers receive or who was behind the fixed-size trades. Kalshi can answer all three questions. So far, it has chosen not to.

How We Did It

Gambling Insider read Kalshi’s CFTC filings and notices page. Trading figures use Kalshi’s public trade data, Binance’s public one-second bitcoin prices and Polymarket’s public perps trade data.

A trade counts as fixed-size if its notional value is within $50 of a size that dominated trading over a period. Times are Eastern. Scripts and data are available to download: the bitcoin, October ether and Polymarket files are in the “follow-up (Oct. 19)” subfolder, along with Kaiko’s ether and bitcoin files, published with Kaiko’s permission.

The ether size-change times and Kalshi’s ether concentration figures are in the “evidence” subfolder from Gambling Insider‘s Oct. 16 report.

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