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Crypto Crowd Bets on Future Events, Not Tokens
27 Jan
Summary
- Crypto traders are shifting to prediction markets like Polymarket.
- Weekly volume on prediction markets surged to nearly $6 billion.
- Prediction markets still leverage crypto infrastructure onchain.
The cryptocurrency trading scene is experiencing a significant shift, with many traders migrating from volatile token markets to prediction markets. Platforms like Polymarket and Kalshi are attracting a growing number of users who now place bets on diverse outcomes, ranging from interest-rate decisions to sports events.
This migration is fueled by a fatigue with the crypto market's volatility and recent downturns. Bitcoin has seen a considerable decline, impacting many altcoins. Prediction markets offer a different kind of speculative engagement, characterized by binary odds and faster resolutions, drawing in the same crowd seeking quicker returns.
Despite the cooling interest in token speculation, the infrastructure underpinning these prediction markets largely remains on-chain, utilizing blockchain technology. This indicates a potentially durable application for crypto, even as traditional token trading wanes. The growth is evident in platform install numbers, which have surged significantly over the past year.
This transition is not without its risks, as many participants in prediction markets also report realized losses. However, the trend signifies a refocusing of speculative energy within the broader crypto ecosystem rather than an outright departure.
