The crypto market has lost a third of its capitalization since October, and investors are switching to platforms for betting on future real-world events. Trading volumes on these platforms have grown more than 15 times in six months.
Since its October 2025 highs, the crypto market has lost nearly a third of its capitalization. Millions of investors were left with depreciated coins, and the audience's attention quickly shifted to precious metals, which were breaking new records. It may seem that the speculative energy of the crypto market has dried up, but it is more a matter of risk redistribution: capital is flowing into other forms of speculation, including prediction markets.
"Crypto is so easy to manipulate. Liquidity can be withdrawn at any moment, and there is fraud at every turn. Traders are only thinking about how to outsmart each other. Everyone is tired of these games," Nickshep Saravanan, founder of the HumanPlane prediction market research platform, told Bloomberg.
In recent months, prediction markets have become almost the only sector of the crypto economy to show positive dynamics. According to Dune, at the end of January, the total weekly nominal trading volume on such platforms exceeded $6.1 billion. In August, the figure was less than $400 million. In October, the volume was just over $2 billion.
The market leaders in terms of volume are Kalshi, Opinion, and Polymarket, which account for more than 95% of the total market.
In October, the crypto market recorded record capitalization values of around $4.3 trillion, and Bitcoin reached a maximum of $126,200. Since then, market capitalization has fallen below $3 trillion, losing more than 30%, and the price of Bitcoin has fallen to just above $88,000.
A new game for speculating with dopamine (the happiness hormone)
In some sectors of the crypto economy, the last three months of last year proved disastrous. As analysts noted, market turbulence during that period led to 7.7 million tokens ceasing trading activity, with the memecoin sector being particularly hard hit.
But the crypto market is always trying to find a new trend, or “game,” for speculation. Industry experts periodically point out that a lack of excitement among crypto traders can lead to a general decline in the market. At the end of 2024, shortly before the US presidential election, Ki Young Ju, head of the CryptoQuant analytics platform, pointed out that without “creating a new game that will stimulate traders' dopamine, the crypto industry will face a long period of stagnation.”
The current growth dynamics in the prediction markets may well become such a “game” for crypto traders, offering the same speculative component and thrills in the form of binary ‘yes’ or “no” bets on real events and quick results, Bloomberg journalists note. There are no “roadmaps,” the publication writes, meaning that investors don't have to wait months for the development team to execute their product development plans — just a “dopamine loop” with a simple outcome.
Despite the growth in volume and interest, such markets still only bring profits to a small portion of investors. According to data from research company defioasis.eth, about 70% of user wallets using prediction markets have recorded losses.
Increased interest
Interest in the sector is also confirmed by app download data. While the figure for cryptocurrency exchanges fell sharply last year, prediction markets moved in the opposite direction.
The number of Polymarket installations grew from 30,000 in January to more than 400,000 by December, according to analytics company Sensor Tower. The number of Kalshi installations increased from 80,000 to 1.3 million over the same period.
Major players in the crypto market are already exploring this new potential trend. For example, in November last year, Google began displaying Polymarket and Kalshi data in its search results and on its updated Google Finance platform, while Yahoo Finance announced that it would display predictions on key economic and political events.
Exchange giants are also showing interest. In October, Intercontinental Exchange (owner of NYSE) conducted a $2 billion financing round for Polymarket. The largest American crypto exchange, Coinbase, added prediction market functionality through a partnership with Kalshi, and Crypto.com is developing its own direction.