CertiK says prediction markets grew to 63.5 billion in 2025, risks rise
Blockchain security firm CertiK warned in a report published on 10 February 2026 that prediction markets expanded rapidly in 2025, but that incentive-driven volume, security design risks and tightening regulation could test whether liquidity and access hold as the sector scales.
CertiK estimated annual prediction-market trading volume rose to about $63.5 billion in 2025, up from $15.8 billion in 2024. The report said activity has concentrated among a small set of platforms, naming Kalshi, Polymarket and Opinion as major liquidity hubs.
The report also pointed to concerns that headline volume can be inflated by incentives and event-driven spikes rather than steady demand. CertiK cited academic research indicating wash trading on Polymarket increased in 2024 and at its peak approached 60% of reported volume, as traders recycled positions to farm rewards. CertiK argued that while such activity can distort liquidity metrics, prices have generally remained useful, with manipulation affecting how busy markets appear more than their ultimate forecasting accuracy.
CertiK outlined conditions it views as more serious, where artificial activity begins influencing price formation. It pointed to persistent price gaps between platforms on the same event that arbitrage does not close, probability moves without a corresponding news or data catalyst linked to concentrated wallet clusters, and a systematic directional bias in market probabilities relative to outcomes. In its comments to Decrypt, CertiK said that if markets are consistently off by roughly 5 to 10 points in one direction and the pattern tracks identifiable whale or wash-trading behavior, that would indicate fake volume is leaking into prices.
CertiK added that the combination of liquidity concentration, security risk and state-level legal pressure could amplify shocks in 2026 if a dominant venue faces an exploit, outage, or enforcement action, tightening liquidity across the ecosystem.
As GNcrypto wrote on 5 February 2026, the Commodity Futures Trading Commission withdrew its 2024 proposed rule on event contracts and pulled a 2025 staff advisory on sports-related contracts, with chair Michael S. Selig saying the agency will draft a new framework instead. The earlier report noted the reset comes as state regulators and courts continue to test how far gambling laws can reach when event contracts trade on federally registered venues.
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