Prediction Markets Boom as Polymarket and Kalshi Redefine Betting on Global Events
Prediction markets have expanded from a niche in decentralised finance to a multi-billion-dollar industry. The sector reached a significant milestone in 2024, driven by high-profile events like the U.S. elections and the rapid growth of platforms such as Polymarket. Now, analysts foresee a long-term bullish trend, supported by clearer regulations and increasing interest from major investors.
The surge in prediction markets began in earnest last year, as trading volumes surged. Platforms like Polymarket, operating on Polygon and Solana, handled $18 billion in trades during 2025 alone. Despite regulatory uncertainties, particularly in Germany, the platform has demonstrated its accuracy in predicting major events, including election outcomes. Meanwhile, Kalshi, a CFTC-regulated competitor, recorded $9-10 billion in volume and expanded its reach through partnerships with Coinbase and CNN. Both platforms remain undervalued, with Kalshi venturing into international and stock markets despite high loss rates among retail traders.
The next phase of growth is likely to focus on highly specialised markets. Projects like Zeitgeist are gaining attention for their speed and lower fees, running on alternative blockchain networks. At the same time, older protocols such as Augur, which experienced sharp price drops, could rebound if market sentiment shifts. Investors are now eyeing undervalued infrastructure projects that support these markets, betting on their potential for substantial returns. Trust remains a key concern in the sector. Decentralised justice protocols, including Kleros, play a crucial role in resolving disputes and ensuring fairness. As the market matures, these systems could see renewed demand, possibly reaching new price highs. Coinbase’s recent entry into prediction markets further signals the sector’s untapped potential, attracting both retail and institutional capital. However, risks persist, particularly with low-cap projects. Extreme volatility is still anticipated, making careful selection vital for investors seeking long-term gains.
The prediction market sector is entering a new phase, with clearer regulations and stronger institutional backing. While opportunities exist in infrastructure and specialised platforms, volatility in smaller projects demands caution. The coming years may witness further expansion, especially as major players like Coinbase deepen their involvement.
