Crypto traders flock to Polymarket and Kalshi after market selloff

After Bitcoin slid nearly 30% from its October high and many altcoins suffered deeper losses, traders who once focused on memecoins and protocol launches have gravitated toward platforms such as Polymarket and Kalshi. There, the action centers on binary contracts tied to real-world outcomes – interest-rate decisions, sports results, weather events and specific price thresholds – offering defined payoffs and rapid resolution compared with volatile spot and derivatives markets.

The appeal lies partly in structure. Prediction contracts allow traders to express a view on a discrete outcome – whether a rate cut happens, whether Bitcoin hits a certain level by month-end – without navigating leverage, funding rates or sudden liquidity gaps. For traders still holding crypto positions, these contracts can function as overlays that pay out if a specific scenario unfolds, offsetting losses elsewhere.

The migration shows up clearly in the data. Weekly notional volume across major prediction platforms surged from about $500 million in June to nearly $6 billion by January, according to Dune. Crypto-related contracts have become the second-most active category on Polymarket, up from fourth a year earlier, with notional crypto volume across Polymarket and Kalshi rising nearly tenfold over the period.

User growth has followed a similar trajectory. Polymarket’s app installs climbed from roughly 30,000 in January to more than 400,000 by December, based on Sensor Tower data. Kalshi’s installs expanded even faster, rising from about 80,000 to roughly 1.3 million. Over the same period, downloads of Binance’s exchange app fell by more than half, highlighting the divergence between token trading and event-based speculation.

Despite the cooling appetite for tokens themselves, the infrastructure traders are adopting remains deeply crypto-native. On Polymarket, most core functions – aside from order matching – run onchain, turning prediction markets into one of the more durable applications of blockchain technology as belief-driven token narratives lose traction.

The backdrop is a broader reckoning for the token economy. More than 11 million coins effectively went dormant or failed last year, the largest shakeout on record, according to CoinGecko. Altcoins lost about $150 billion in value between the end of 2024 and the end of 2025, TradingView data show, with many wiped out during October’s crash that also triggered automatic liquidations across major exchanges.

Crypto traders have not disappeared so much as rerouted. Both Polymarket and Kalshi list contracts tied to future Bitcoin prices, and CoinMarketCap – long a hub for token tracking – has added a dedicated prediction-markets section. Major crypto firms are leaning in as well. Coinbase introduced prediction markets in December through Kalshi, while Gemini and Crypto.com are developing their own offerings, with Crypto.com white-labeling services for partners including Trump Media.

Clear Street’s Owen Lau estimates Coinbase could generate about $700 million in prediction-market revenue, while Robinhood’s annualized run rate from the category is already near $300 million. A Mizuho survey found Coinbase and Robinhood users were nine times more likely to participate in prediction markets than the general population.