A brutal crypto crash has erased $150 billion in value and driven traders into a different kind of gamble; sports, politics, and real-world prediction markets.
People who used to trade memecoins now track election odds, weather forecasts, and even central bank decisions.
Analyst Nikshep Saravanan reportedly used to spend his days building a digital creator startup, pitching to VCs, and trading memecoins. But by January, he quit. “As I was trying to get traction without funding, the prediction-markets space started blowing up,” said Nikshep.
Traders leave altcoins and bet on real-world events
The traders aren’t just bored. They’re tired. Bitcoin is down nearly 30% since October. Many altcoins lost even more. Interest faded. Attention dropped. But prediction markets gave them something else. It’s still gambling. Still fast.
But now it’s about real things, with binary outcomes and quick results. No long whitepapers. No three-year plans. Just yes or no.
Nikshep started a new platform called HumanPlane. It tracks prediction markets linked to elections, sports, and anything else people are betting on. “Here I can do a lot more with no capital,” he said. “There’s so much more interest here.”
He isn’t alone. The weekly notional volume on sites like Polymarket and Kalshi went from $500 million in June to almost $6 billion in January, data from Dune shows.
Polymarket runs onchain. So does Kalshi. Most of the trade steps use crypto infrastructure. Only the order matching happens off-chain. So while token speculation is losing heat, the rails underneath it are still working. That’s why prediction markets exploded just as exchanges started to shrink.
Exchanges lose users as prediction platforms gain ground
Apps tell the story. Polymarket’s installs jumped from 30,000 to over 400,000 in one year, according to Sensor Tower. Kalshi went from 80,000 to 1.3 million. Binance, the biggest crypto exchange in the world, saw downloads drop by more than 50%.
Behind that drop is something deeper. More than 11 million coins died in 2025. CoinGecko called it the biggest extinction event in crypto history. Altcoins lost about $150 billion between late 2024 and late 2025, per TradingView. The October crash wiped out tokens and triggered auto-liquidations across exchanges. Platforms froze. Liquidity vanished. People gave up.
“Crypto is so ruggable,” said Nikshep. “People can remove liquidity, there’s swiping. People try to overcompete each other. People are kind of tired of the game.”
Tre Upshaw, another Canadian who got burned trading memecoins like SafeMoon, switched lanes too. He now runs Polysights, an analytics dashboard for prediction markets. “I realized that’s just hyper gambling,” said Tre. “I got burned so many times on memecoins.” But not everyone is winning in prediction markets either. Data from defioasis.eth shows 70% of trading addresses are at a loss.
The traders didn’t leave crypto completely. They just changed lanes. Polymarket and Kalshi now let users bet on Bitcoin’s price. One year ago, crypto contracts were the fourth most traded category on Polymarket. Now they’re second. Notional volume for those trades has gone up nearly tenfold, per Dune. Even CoinMarketCap now shows prediction markets on its homepage.
The big firms are following. Coinbase launched prediction markets in December. Trades go through Kalshi. Gemini and Crypto.com rolled out similar products. Crypto.com even white-labeled the service for Trump Media. Max Branzburg from Coinbase said users “want a single venue to trade everything.”
The money is showing up too. Clear Street’s Owen Lau said Coinbase could make $700 million from prediction markets in 2026. Robinhood is already making $300 million a year from it. A Mizuho survey found users on both platforms were nine times more likely to use prediction markets than the general public.
Coinbase bought The Clearing Company and plans to expand even more. “As we add more instruments, they tend to complement each other,” said Max.
Tre summed it up: “A lot of people who are still in crypto are using onchain prediction markets as well.”
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Source: https://www.cryptopolitan.com/crypto-crash-pushes-sports-politics-bets/
