TL;DR
- Polymarket installs surged 1,200% to over 400,000, and prediction volume hit nearly $6B from $500M in June as altcoins lost $150B.
- CoinShares logged $1.73B of outflows and spot bitcoin ETFs shed $1.62B as basis yields dipped below 5%.
- Memecoin traders are rotating into event contracts, but 70% show realized losses; top 0.04% captured over 70% profits, while on-chain settlement and exchange rollouts boost traction.
Crypto markets absorbed a reset, shedding $150 billion in altcoins, yet one corner kept accelerating overall. Prediction markets are emerging as an engagement engine as token speculation loses momentum. Polymarket app installs surged 1,200%, climbing from 30,000 to over 400,000 between January and December 2025, and weekly volume across Polymarket and Kalshi expanded from $500 million in June to nearly $6 billion in January, while exchange downloads fell by over half. CoinShares logged $1.73 billion of outflows, and spot bitcoin ETFs shed $1.62 billion as basis yields dipped below 5%.
Traders Pivot to Event Markets
Former memecoin traders are helping drive the pivot, preferring binary odds on real-world outcomes to multi-year roadmaps. The value proposition is simple, faster feedback loops with less narrative overhead. One builder, Nikshep Saravanan, shifted from a digital creator startup to HumanPlane, saying he could do more without capital, while Tre Upshaw moved on from losses in memecoins like SafeMoon to run Polysights. The migration is not a free lunch: about 70% of trading addresses show realized losses, and fewer than 0.04% captured over 70% of $3.7 billion in profits, at scale.
The irony is that the rails remain crypto-native even as users step away from token picking. On Polymarket, nearly everything except order matching happens on-chain, turning blockchain into the settlement layer for belief-based trading. Crypto contracts have climbed to the second-busiest category on the platform, up from fourth a year ago, and notional crypto volume increased nearly tenfold across prediction venues, according to Dune data. The broader fatigue backdrop is clear: Bitcoin fell nearly 30% from its October peak, and more than 11 million coins effectively died last year, per CoinGecko.
Major platforms are racing to package event markets as a mainstream product, not a niche. Exchanges see prediction contracts as a retention lever that complements spot, derivatives, and payments in one venue. Coinbase added prediction markets in December via Kalshi routing, with analyst Owen Lau projecting $700 million of 2025 revenue potential, while Robinhood’s annual run rate is near $300 million; Gemini and Crypto.com also launched efforts. Polymarket returned to the U.S. after CFTC approval with 10 basis point taker fees and zero maker fees, and it has added real estate bets.
