Since the October highs of 2025, the crypto market has lost almost a third of its capitalization. Millions of investors are left with devalued coins, and audience attention has quickly shifted towards record-breaking precious metals. It may seem that the speculative energy of the crypto market has dried up, but it's more about risk redistribution: capital is flowing into other forms of speculation, including prediction markets.
'Crypto is so easy to manipulate. Liquidity can be pulled at any moment, there are machinations at every turn. Traders are only thinking about how to outsmart each other. Everyone is already tired of these games,' reflects Nikship Saravanan, founder of the prediction market research platform HumanPlane, for Bloomberg.
In recent months, prediction markets have become almost the only sector of the crypto economy showing positive dynamics. According to Dune at the end of January, the total weekly nominal trading volume on such platforms exceeded $6.1 billion, while in August it was below $400 million. In October, the volumes were just above $2 billion.
The market leaders by volume are Kalshi, Opinion, and Polymarket — they account for more than 95% of the entire market.
In October, the crypto market recorded a record capitalization of about $4.3 trillion, while Bitcoin reached a maximum of $126,200. Since then, the market capitalization has dropped below $3 trillion, losing more than 30%, and the price of Bitcoin decreased to slightly above $88,000.
'Dopamine loop' of predictions
In some sectors of the crypto economy, the last three months of the past year turned out to be catastrophic. As noted by analysts at CoinGecko, the market turbulence of that period led to 7.7 million tokens ceasing to show trading activity, with a particularly strong blow dealt to the meme coin sector.
But the crypto market is always trying to find a new trend, or 'game', for speculation. Industry experts periodically note that the lack of excitement among crypto traders could lead to an overall downturn in the market. At the end of 2024, shortly before the US presidential elections, the head of the analytics platform CryptoQuant, Ki Yoon Joo, pointed out that without 'creating a new game that will stimulate traders' dopamine, the crypto industry faces a prolonged period of stagnation.'
The current growth dynamics in prediction markets may well become such a 'game' for crypto traders, offering the same speculative component and excitement in the form of binary bets 'yes' or 'no' on real events, with fast results, journalists from Bloomberg note. There are no 'roadmaps', the publication writes, meaning that investors do not have to wait months for a development team to execute its product development plans — only the 'dopamine loop' with a simple event occurrence option.
Despite the growth in volumes and interest, such markets still only yield profits for a small number of investors. According to research company defioasis.eth, about 70% of user wallets using prediction markets recorded losses.
Growth of interest
Interest in the sector is also confirmed by data on app downloads. While the figure for cryptocurrency exchanges sharply declined last year, prediction markets moved in the opposite direction.
The number of Polymarket installations increased from 30,000 in January to more than 400,000 by December, according to analytics company Sensor Tower. The number of Kalshi installations during the same period grew from 80,000 to 1.3 million. Binance, the world's largest cryptocurrency exchange, saw its downloads decline by more than half.
Major players in the crypto market are already mastering a new possible trend. As noted in early January, according to Bloomberg, Robinhood CEO Vlad Tenev said, 'We are at the very beginning of the supercycle of prediction markets.'
For example, in November last year, Google began showing data from Polymarket and Kalshi in search results and on the updated Google Finance platform, while Yahoo Finance announced the display of forecasts for key economic and political events.
Interest is also shown by exchange giants. In October, Intercontinental Exchange (owner of NYSE) conducted a funding round for Polymarket at $2 billion. The largest American cryptocurrency exchange, Coinbase, added prediction market functionality through a partnership with Kalshi, while Crypto.com is developing its own direction.
