Chainfeeds Summary:
The popularity of anything requires a confluence of favorable circumstances: the right time, the right place, and the right people.
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https://www.theblockbeats.info/news/60730
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Opinion:
Cookies: Reports indicate that the prediction market is projected to achieve a staggering 400% growth rate by 2025, with total trading volume expected to grow from approximately $900 million in 2024 to $40 billion. The user base is also expected to increase 3-4 times, from approximately 4 million in 2024 to 15 million in 2025. Retail investors familiar with prediction markets should be well aware of the hot topics of the past two years, such as the 2024 US presidential election and the 2025 League of Legends World Championship. One might subconsciously assume that these hot topics drove the development of the prediction market. However, this is clearly not the only and core factor. Traditional betting platforms also offer similar odds, and even compared to the binary "Yes/No" of prediction markets, traditional betting odds offer more variety, such as "handicap" and so on. Moreover, before the rise of Polymarket and Kalshi, prediction markets already had a precedent. The earliest available prediction market platform was Iowa Electronic Markets (IEM), launched by the University of Iowa in 1988 for predicting the 1988 US presidential election. Even among prediction market platforms that incorporate blockchain technology, Polymarket wasn't the pioneer; Augur on Ethereum in 2018 was. Significant regulatory progress is a crucial factor, and the relaxation of regulations has contributed to the explosion of prediction markets on multiple levels. First, there's the expansion of distribution channels. On November 25th, the CFTC approved Polymarket's Amended Order of Designation, allowing it to re-enter the US market as a Designated Contract Market (DCM). Kalshi also directly integrated with Robinhood and Coinbase this year. More importantly, after compliance, prediction markets have a wider distribution channel in the US than traditional gambling, covering all 50 states, while traditional gambling distribution channels only cover about 30 authorized states. More significantly, compliance clarifies the positioning of prediction markets as legitimate commodity derivatives rather than gambling, affirming their positive significance. This expands the distribution audience beyond traditional gambling enthusiasts to include investors and decision-makers. For ordinary people, seeing traditional media citing prediction market data or seeing internet search engines like Google directly indexing prediction market data provides a positive, mainstream perception—something the cryptocurrency industry has long desired. Secondly, favorable policies have instilled confidence in institutional investors, leading to rapid growth in prediction market funding. Polymarket and Kalshi both completed three rounds of new funding in 2025, raising over $1 billion each. This has given them better conditions to offer better products and liquidity. Finally, the types of events covered by prediction markets have also expanded. In 2024, Kalshi won its lawsuit against the CFTC, allowing it to list more types of event predictions, such as cryptocurrency-related events, and since January of this year, this has expanded to include sporting events. The CFTC dropped its appeal in May of this year. Currently, sports event predictions account for approximately 90% of Kalshi's trading volume. A report by Eilers & Krejcik suggests that, in the long term, sports event predictions will account for 44% of the total prediction market trading volume.
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