How will the prediction market accelerate again after the election in 2025

Author: 0xWeiler Source: X, @0xWeiler Translation: Shan Ouba, Jinse Finance

Breakthrough Applications in 2025

During the 2024 US election, prediction markets successfully entered the mainstream spotlight — the election odds on Polymarket and Kalshi platforms appeared alongside traditional polling data, becoming an alternative indicator of electoral sentiment. Ultimately, these prediction markets’ forecasts for election outcomes proved to be far more accurate than traditional polls.

Five months before the election, trading volume on Polymarket and Kalshi exploded by 3186% — from $140 million in May 2024 to $4.6 billion in October 2024 (the peak month before the November 5th election). This surge made prediction markets one of the first application scenarios in the crypto industry to achieve breakthrough development.

However, in 2024, political markets accounted for 62% of total prediction market trading volume, leading many to believe that politics was the only practical application scenario for prediction markets, and questioning whether market demand could sustain after the election cycle ended.

Initially, skeptics’ views seemed validated: in the four months after the election, monthly trading volume plummeted by 63%, from $4.6 billion in October 2024 to $1.7 billion in February 2025.

But throughout the remaining part of 2025, prediction markets proved with actual performance that, beyond politics, they also have clear product-market fit (PMF).

After bottoming out in February, the monthly trading volume on Polymarket and Kalshi steadily increased, reaching a 441% growth by November, totaling $9.2 billion. The trading volumes in September, October, and November 2025 all surpassed the October 2024 peak.

This growth was mainly driven by non-political markets, including sports, crypto, and culture sectors. From July to December 2024, non-political markets accounted for 38% ($6 billion) of the total trading volume on the two platforms; from January to November 2025, this proportion increased to 80% ($31.1 billion). Prediction markets successfully broke through the election-driven demand limitation, achieving sustained application in non-political scenarios.

Where Does the Growth Come From? Where Will It Go in 2026?

In 2025, the sports sector became the main engine of prediction market trading volume growth. From January to November, sports markets led with 58% ($23.1 billion), followed by politics at 20% ($7.8 billion), crypto at 11% ($4.5 billion), and culture at 3% ($1.2 billion).

A key catalyst for the explosive growth in sports markets was the partnership between Kalshi and Robinhood announced on August 19 — users can trade prediction products related to NFL and college football games through Robinhood’s prediction market center. This collaboration had a dual impact: on one hand, non-crypto-native users could participate directly using their existing Robinhood accounts, lowering the barrier to entry; on the other hand, it provided US users with a compliant channel for trading sports event outcomes with better odds than traditional sportsbooks like DraftKings and FanDuel. After the partnership, the monthly trading volume in sports markets surged from $965.2 million in August to $6.3 billion in November, a 551% increase.

Despite the strong momentum in 2025, prediction market trading volume still accounts for only a small part of the entire sports betting industry. In 2024, licensed US sports betting platforms handled a total of $150 billion in trading volume, with FanDuel processing $50.7 billion and DraftKings $49.4 billion.

Prediction markets still lag behind traditional platforms in sports betting volume mainly due to limited betting types, especially parlay bets and player props. Polymarket does not support parlays, Kalshi offers limited parlay functionality, and both platforms have relatively scarce player prop products. This limitation is critical — estimated to account for 30% of traditional sports betting volume, with high implied payout rates that are very attractive to retail bettors. Without improving parlay and player prop offerings, prediction markets will struggle to meet the large demand in sports betting.

We believe that breaking through the restriction of a single betting type presents a clear opportunity to narrow this gap, and will be a core focus for prediction markets in 2026.

Even with these limitations, prediction markets still hold a competitive advantage in key pricing aspects. Their order book-based structure allows users to trade directly with each other rather than against a “bookmaker,” resulting in better odds and higher expected payouts for the same outcomes. This advantage is especially significant for “whale” users making large bets — even tiny improvements in odds can significantly impact their returns. In 2026, we expect this pricing advantage to continue attracting users from traditional sports betting platforms (especially large bettors), further boosting trading volume in sports markets.

Although sports dominates trading volume, the culture sector became the fastest-growing segment in prediction markets in the second half of 2025. From August to November, monthly trading volume in culture markets grew from $4.36 million to $31.61 million, a 625% increase. This growth was driven by sustained activity across multiple cultural markets, rather than a single hot event.

The importance of culture markets lies in two aspects: first, their trading volume-to-open interest ratio ranks second among all sectors (only behind sports), indicating high turnover and frequent settlement. This characteristic benefits platforms that profit from trading volume, as users continually cycle funds rather than locking them in long-term bets.

Second, there are no true substitute scenarios for culture markets. Sports markets need to compete with traditional sportsbooks, but for trading outcomes related to internet culture, entertainment, and public social sentiment (e.g., “Which Netflix series will be the hottest this week?”), there are currently no comparable alternatives. Prediction markets are the only platforms allowing users to create and trade such markets. Similar to the political prediction markets in 2024 — due to the lack of feasible alternatives, trading activity was highly concentrated, driving rapid volume expansion.

This structural advantage provides a clear path for culture markets to break through early user adoption barriers and achieve sustained popularity. Kalshi CEO Tarek Mansour stated that over the next five years, culture markets will have the greatest growth potential among all prediction market sectors. As prediction markets penetrate non-crypto-native user groups, they will naturally reach users with expertise in cultural fields. Once these users realize they can monetize their knowledge through prediction markets, they will flock to this unique monetization channel. Considering all these factors, we believe that by 2026, culture markets will rank among the top three fastest-growing sectors in prediction market trading volume.

Competitive Landscape

In 2025, the open interest (OI) in prediction markets showed a duopoly — Polymarket and Kalshi together accounted for 91% of the market ($627.7 million). From June 1 to November 30, Kalshi’s open interest grew 258%, from $93.7 million to $335.3 million; during the same period, Polymarket’s open interest increased 133%, from $125.3 million to $292.4 million. Throughout the year, the gap between the two platforms remained small but they both significantly outpaced smaller competitors.

The growth in open interest coincided with a year of active ecosystem expansion for both platforms. In 2025, both established partnerships with mainstream brands such as CNN, CNBC, UFC, NHL, and Yahoo Finance to expand distribution channels, which is expected to further boost mainstream exposure. Meanwhile, both raised substantial capital: Polymarket completed three funding rounds, including a $2 billion investment from Intercontinental Exchange (ICE), the NYSE parent company, on October 7, giving it a valuation of $9 billion; Kalshi completed two funding rounds, with a $1 billion undisclosed investor financing on November 19 raising its valuation to $11 billion.

Overall, the growth in open interest, expansion of distribution channels, and new capital injections in 2025 have laid a foundation for Polymarket and Kalshi. Even without additional product launches or incentive programs, they are expected to maintain their current growth pace into 2026.

In the second half of 2025, Polymarket focused on launching its US version app, which opened to waitlist users on December 3. This public release marked a major breakthrough in distribution, likely to significantly boost Polymarket’s open interest and trading volume in 2026. After partnering with Robinhood in August, Kalshi’s open interest and trading volume surged, successfully attracting non-crypto-native users. If Polymarket’s US app shows a similar growth trajectory after full launch, its open interest and trading volume could see substantial increases.

Beyond distribution, potential airdrop activities will serve as another major growth catalyst. On October 24, Polymarket’s Chief Marketing Officer Matthew Modabber confirmed plans to launch $POLY tokens and conduct future airdrops. While specific timing remains uncertain, market expectations are for this to occur in 2026. Coupled with the full US app launch, airdrops will provide Polymarket with additional incentives that Kalshi currently lacks. If these two catalysts materialize smoothly in 2026, Polymarket’s growth in open interest could surpass Kalshi, widening the gap with its closest competitor.

Throughout most of 2025, aside from Polymarket and Kalshi, other prediction platforms made little substantive progress in open interest until Opinion entered the scene. On October 24, Opinion launched its prediction market platform Opinion.Trade on BNB Chain, quickly reaching an open interest of $63.2 million. Prior to Opinion’s launch, no prediction platform besides Polymarket and Kalshi had open interest exceeding $3 million, making Opinion’s early performance particularly notable.

Opinion did not simply copy existing platforms’ models but launched the first native BNB Chain-based prediction market, featuring a differentiated product, Opinion AI. This is a market creation tool that allows users to generate well-defined “Yes/No” markets with simple prompts, creating markets at a much faster rate than competitors. In terms of open interest and trading volume, Opinion has already distinguished itself from long-tail crypto-native competitors like Limitless and Myriad. By combining its differentiated market creation product with BNB Chain’s user base, Opinion successfully entered the top three prediction markets by the end of 2025. In 2026, we expect it to become one of the best-performing crypto-native alternative platforms after Polymarket and Kalshi.

Traditional sports betting platforms outside the crypto industry will also intensify market competition. In 2026, DraftKings and FanDuel are expected to enter prediction markets, primarily targeting users in states like California and Texas where traditional sports betting remains illegal, and launching non-sports markets such as politics and macroeconomics. After acquiring the CFTC-licensed exchange Railbird, DraftKings plans to launch DraftKings Predictions in Q1 2026; FanDuel has indicated a similar strategy, positioning prediction markets as a supplement to sports betting, allowing users to trade on elections, oil prices, and other events.

In macroeconomics and non-sports markets, traditional sports betting platforms have clear distribution advantages and are expected to capture some market share in 2026, especially in areas previously inaccessible to their users. While DraftKings and FanDuel already dominate sports betting volume, launching prediction markets is unlikely to significantly increase their share in sports; however, their impact in non-sports markets will be more profound — previously, crypto-native prediction markets held an advantage due to easily accessible products like Fed rate decisions. As traditional sportsbooks introduce similar prediction products, the exclusivity of the largest and most liquid non-sports markets will diminish. Nonetheless, we believe crypto-native prediction markets will maintain an edge in market diversity and long-tail coverage, even as traditional giants compete for hot markets, helping them sustain active trading.

Ultimately, despite facing dual competition from crypto-native prediction markets and new entrants from traditional sports betting platforms, we believe Polymarket and Kalshi will continue to dominate the prediction market space. If Polymarket successfully advances its US app launch, token issuance, and potential airdrops, it could surpass Kalshi. In any case, both platforms possess strong brand recognition and capital resources, and will remain leading players in the prediction market landscape for the foreseeable future.