Settlement Terms: 0 of 21 Bitcoin Pairs Settle Alike
Two contracts can name the same event and the same strike and still be different instruments. The rules, not the title, decide.
Published 2026-11-10 · Research dated 2026-09-28 · Market & data intelligence · Educational, not advice.
A market's title tells you the question. Its settlement terms decide whether it pays. A touch contract pays if a price is reached at any moment, and a terminal contract pays only on where the price sits at expiry. In a Delta Arc study dated September 28, 2026, 0 of 21 strike-matched Kalshi and Polymarket Bitcoin pairs shared a settlement type. The steady price gap between them is explained by two different instruments, not a pricing error between identical contracts.
Most people read a prediction market the way they read a headline: the title says what the market is about, and the price says how likely it is. The part that decides whether a contract pays lives in the settlement terms. Two markets with nearly identical titles can have very different ones.
Where settlement terms fit
A prediction market is an exchange. Every contract has a buyer and a seller. The exchange matches them and takes a fee, rather than setting the price and taking the other side of every trade itself. The price is just where the most recent buyer and seller agreed, and it moves continuously until the outcome is known. That is the difference from a sportsbook, which sets its own price and takes the other side of every bet.
What both counterparties agree to is the contract's rules. Kalshi's Help Center says each contract's terms and conditions set the rules for its outcome, the information used and the source of that information. Polymarket's documentation is blunter: the title describes the question, but the rules define how it resolves, and each market names its own resolution source.
Touch, terminal and average
For anything tied to a price, such as Bitcoin or a stock index, the rules usually take one of three shapes.
- Touch (or barrier): pays if the price reaches the level at any point before the deadline. Where it ends up does not matter.
- Terminal: pays only on where the price sits at a stated time. Where it traveled along the way does not matter.
- Average: pays on an average of the price over a defined window, which blunts a single spike.
These are different instruments. The strike tells you the level. The settlement type tells you what has to happen at that level.
One Bitcoin strike, two payoffs
A clean example comes from Delta Arc research dated September 28, 2026. The study found that Polymarket's question on whether Bitcoin reaches $130,000 by December 31, 2026 resolves Yes if the high of any single Binance one-minute candle reaches that price. One minute is enough. That is a touch contract.
Kalshi's Bitcoin above/below contracts work differently. Per Kalshi's BTC contract terms, those markets settle on a simple average of the CF Benchmarks Bitcoin Real-Time Index over the 60 seconds before the stated time. That window is short and sits at expiry, so the payoff is set by where the price is at expiry, not by where it went. The study treats these as terminal contracts.
Now picture Bitcoin trading through $130,000 in the spring and finishing December below it. The touch contract pays. The expiry-based contract on the same strike pays nothing. As the Delta Arc study puts it, the two positions do not offset each other, because they never described the same event. The two sides even read different price feeds: a Binance candle on one side, a benchmark index on the other.
The gap that looked like a signal
The same study matched Kalshi and Polymarket Bitcoin markets by strike. It confirmed 21 pairs. None of the 21 shared a settlement type. Every one paired a Kalshi terminal contract with a Polymarket touch contract.
Before the terms were checked, those pairs looked interesting. In the study, Delta Arc measured a median price gap of 0.013 against a quoted spread of 0.020. Kalshi was priced higher, and the sign of the gap held steady over about an hour, a sign stability of 1.00.
The gap was real, but it is explained by the pairs being different instruments, not by one identical contract being mispriced against another. The study had tested whether identical contracts were priced differently across venues, and it rejected that idea because the contracts were not identical. Matching on strike proved necessary but not sufficient. The working rule became: match on settlement type first, then compare prices.
Who decides, and when
The resolution process differs between venues as well. Kalshi's Help Center says determining an outcome can take from one hour to more than twelve hours after a market closes. Polymarket's documentation says its markets resolve through the UMA Optimistic Oracle. Anyone can propose an outcome by posting a bond. A two-hour challenge period follows, and an outcome disputed twice goes to a vote of UMA token holders. Neither process changes what the rules say. They change how, and how quickly, the rules get applied.
What we built from it
On October 2, 2026, Delta Arc added a settlement-type check to its cross-venue matcher. A price gap is now reported only when both sides settle the same way, terminal against terminal or average against average. The unchecked figure is kept for research only. In a synthetic test, a terminal-versus-touch Bitcoin pair with a raw gap of +0.11 was blanked, while a terminal-versus-terminal pair's gap of 0.04 was kept.
Most non-crypto pairs, such as elections and macro markets, are left out until their terms are verified. Each market's resolution text stays the authority. Delta Arc's Prediction Markets product shows Kalshi and Polymarket markets side by side, and this filter sits underneath it.
The next time two venues seem to disagree about the same event, the first question is not which price is right. It is whether they are pricing the same thing at all. Elections and economic releases have their own versions of this problem, and that is where The Line goes next.
Sources: Delta Arc research; Kalshi BTC contract terms; Kalshi Help Center, Market outcomes; Polymarket Documentation, Resolution.
Sources
Outside pages cited in this post, in order of first citation
- Kalshi's Help Centerhelp.kalshi.com
- Polymarket's documentationdocs.polymarket.com
- Kalshi's BTC contract termsassets.kalshi.com
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