logo
    • Buy Crypto
    • Markets
    • Futures
    • Spot
    • Earn
    • Affiliates & AI
    • More
    1. WEEX
    2. Crypto News
    3. Why Did the Prediction Market Take Nearly 40 Years to Explode?

    Why Did the Prediction Market Take Nearly 40 Years to Explode?

    By: blockbeats|2026/03/29 17:46:45
    0
    Share
    copy
    Prefer us on GooglePrefer us on Google
    P2PP2P
    GPT AIGPT AI
    Alien InvasionAlien Invasion
    Ai.comAi.com
    AI ProtocolAI Protocol
     

    Over the past year, the rapid growth of the prediction market has attracted more and more players from both the crypto world and beyond. When discussing the prediction market with different friends, I often explain the differences between the "betting against the house" model and the "financialization of information" to highlight the distinction between the prediction market and traditional gambling. As these discussions have increased, I have gradually realized that these points may not be intuitive enough for friends who have not been exposed to the prediction market. In fact, they have raised some very interesting and sharp questions, such as:

    I can understand the difference between "betting against the house" and "P2P player-to-player gaming," but in essence, both of these models still result in real-money gambling. Why then does the U.S. government treat the two so differently?

    If the lenient treatment of the prediction market is due to the many benefits of the "financialization of information," why didn't such a good thing become popular earlier and instead only experienced a boom in 2025?

    There have already been many discussions about the advantages and future prospects of the prediction market. Therefore, in this article, we will explore the prediction market from a more intriguing perspective.

    Why did the prediction market experience a boom in 2025?

    Reported data indicates that in 2025, the prediction market is expected to achieve a staggering 400% growth rate, with total transaction volume projected to grow from around $900 million in 2024 to $40 billion. The user base is also expected to increase by 3-4 times, from about 4 million in 2024 to 15 million in 2025.

    Retail players familiar with the prediction market should be well aware of the hot topics in the past two years, such as the 2024 U.S. presidential election and the 2025 League of Legends global finals. One might instinctively think that these hot topics have been driving the development of the prediction market.

    However, this is clearly not the sole and core factor. Traditional gambling platforms also offer similar markets, and compared to the binary "Yes/No" of the prediction market, traditional gambling markets have more variety, such as "spread betting." Moreover, before the rise of Polymarket and Kalshi, there was a precedent for the prediction market. The earliest available prediction market platform was the Iowa Electronic Markets (IEM), launched in 1988 by the University of Iowa for the 1988 U.S. presidential election. Even in the case of prediction market platforms utilizing blockchain technology, Polymarket was not the pioneer but rather Augur on Ethereum in 2018.

    A key factor has been significant regulatory progress, and regulatory loosening has, on multiple levels, powered the prediction market breakout.

    First is the expansion of distribution channels. On November 25, the CFTC approved Polymarket's Amended Order of Designation, allowing it to re-enter the U.S. market as a Designated Contract Market (DCM). Kalshi also directly embedded with Robinhood and Coinbase this year. More importantly, post-compliance, the U.S. distribution channels of the prediction markets are more extensive than traditional gambling, covering all 50 states, while traditional gambling distribution channels only cover over 30 authorized states.

    More profoundly, compliance has clarified the prediction markets' positioning as legitimate commodity derivatives rather than gambling, affirming the positive significance of prediction markets. This has expanded the distribution's audience beyond traditional gambling enthusiasts to include investors and decision-makers. For the general public, seeing traditional media report data from prediction markets or seeing search engines like Google directly index data from prediction markets provides a "walk into the room" positive impression, which is precisely what the cryptocurrency industry has been aiming for for many years.

    Secondly, policy friendliness has given institutional investors ample confidence, leading to rapid growth in the prediction market's funding path. Both Polymarket and Kalshi completed a total of three new funding rounds in 2025, with each new round totaling over $1 billion. This has provided them with better conditions to offer improved products and liquidity.

    Lastly, the event category of prediction markets has also become richer. In 2024, Kalshi won a lawsuit against the CFTC, allowing for the listing of more types of event predictions, such as cryptocurrency-related events, and expanded to sports events starting in January of this year. The CFTC then dropped its appeal in May. Currently, sports event predictions account for approximately 90% of Kalshi's trading volume. Eilers & Krejcik's report suggests that in the long term, sports event predictions will represent 44% of the total prediction market trading volume.

    Of course, whether it is Kalshi, which has always strictly followed compliance and the off-chain path, or Polymarket, which initially took an offshore-to-compliance and on-chain path, the improvement of prediction market products themselves, and the advancement of AI technology have provided more comprehensive tools for the entire prediction market ecosystem, contributing to making 2025 the year of the prediction market. As mentioned earlier, the earliest on-chain prediction market, Augur, was previously criticized for its poor user experience and remained dormant for four years before announcing its takeover and relaunch by the Lituus Foundation in March of this year. Anything's success requires a combination of timing, location, and people, and the prediction market finally reaped its rewards in 2025 after waiting for the right moment.

    Why Does the US Government Treat "Prediction Markets" Differently?

    This is a very interesting question, and even I myself had this confusion at the beginning—as the prediction market itself does not act as the house, provide odds, or engage in gambling with users, we cannot say that gambling does not occur in peer-to-peer prediction. Otherwise, we could also say that playing poker is not a form of gambling because the house does not personally participate in playing poker but rather takes a rake, and peer-to-peer gambling only occurs among the poker players.

    At the same time, traditional gambling platforms, for their own benefit, also have professional teams to analyze various events for gambling, providing reasonable odds as much as possible. In the past, traditional media and institutional research reports have cited odds from traditional gambling platforms for event reporting and analysis. Although compared to traditional gambling, the prediction market indeed better reflects "collective cognition" and is immune to the biases of a single team, and does not intentionally adjust odds to cater to the mainstream to increase overall betting volume like traditional gambling platforms do by taking a rake to even out losses caused by unreasonable odds, and in some events also demonstrate higher real-time responsiveness and accuracy, it does not seem to constitute an overwhelming advantage over traditional gambling platforms.

    Whether for traditional gambling enthusiasts or ordinary retail investors in the prediction market, our grasp and analysis of events are mostly not as good as professionals, which means losses are common.

    So, does the US government not worry about the gambling nature of prediction markets causing harm to the public? Of course not, otherwise the compliance journey of prediction markets would not have been so rocky over the years.

    Internationally, some prediction markets operate directly under a gambling license, such as the UK's Betfair political prediction market. Recently, US Nevada District Court Judge Andrew Gordon lifted a ban protecting the prediction market company Kalshi from state regulation and ruled that Kalshi's sports event predictions do not fall under the transactions defined by the "Commodity Exchange Act." The judge believed that these prediction events are very similar to sports betting, thus falling under Nevada's gambling regulations. Based on this, the court ruled that sports event prediction markets cannot evade the oversight of the Nevada Gaming Control Board and the Nevada Gaming Commission.

    But the government's starting point is the "overall positive externality." Just as the stock market makes the vast majority of stockholders "pay tuition fees" but greatly promotes the overall social and economic operation, although the prediction market is essentially still gambling, its key benefits such as enhancing information efficiency and assisting decision-making are crucial. As long as the harms can be mitigated through comprehensive regulation, we cannot throw out the baby with the bathwater.

    Of course, at this point, you might still say that the "overall positive externality" is a weak argument, and traditional gambling can still achieve similar effects. However, at the very least, there is one undeniable point, that is, the mechanism of the prediction market itself determines that the platform can only "propose topics" and cannot "rig the game." Whether it's Polymarket or Kalshi, they can only choose topics that the public finds appealing as much as possible to incentivize betting, and they cannot manipulate the odds.

    Moreover, except for the United States, governments in other countries and regions around the world currently share the same view as yours. The segmentation between prediction markets and traditional gambling, as well as the issuance of "event contract" licenses for prediction markets, are unique to the United States. As the prediction market continues to grow, controversies surrounding gambling will persist, and whether the U.S. government's stance will change remains unknown.

    Alternatively, why not let the prediction market predict..?

    A Haven for Insider Traders?

    This is a very interesting question. If we were to ask whether insider trading in the stock market is good or bad, we would all say it's bad. However, what if we shift the focus of this question to the prediction market?

    My colleague believes that this is where the value of the prediction market lies. The presence of insider information certainly creates unfair advantages in betting, but it also enables the most accurate information disclosure. Therefore, a true prediction market should be like Polymarket, built on-chain, requiring no KYC while providing anonymity.

    This viewpoint is actually quite common, as evidenced by this tweet from @shafu0x that received considerable acclaim:

    Why Did the Prediction Market Take Nearly 40 Years to Explode?

    "Insider trading is a feature of prediction markets, not a bug."

    Supporters of this view believe that as long as the information leaked through insider trading has an overall positive externality, then it is justified. At the same time, they also believe that the prediction market cannot do without these insiders, as without them, the accuracy of event prediction in the market would significantly decline, leaving only uninformed individuals to gamble.

    While this viewpoint has its merits, I believe the platforms behind prediction markets would resist this positioning because in the long run, it would damage retail investors' trust, fundamentally changing the market from a platform that encourages individual research and insights, and aggregates collective wisdom, into a unilateral "massacre" by insider informants, hindering liquidity development. If a prediction market were to function this way, it might as well be renamed an "information bounty platform."

    Kalshinomics founder @probaaron countered @shafu0x's view, "I usually disagree with this assertion. Yes, they can indeed provide more accurate predictions, but as they become more prevalent, retail interest in speculation diminishes (for example, I do not want to participate in a market with a high likelihood of insider trading)."

    Overall, I believe that platforms built on-chain like Polymarket, which are transparent, verifiable, and offer anonymity, have fulfilled our expectations of decentralization. Anyone can freely participate in prediction markets without worrying about anything, and the only responsibility is to be accountable for one's own bets. The harsh reality is that there is significant wealth transfer in the world due to information asymmetry, and what happens in prediction markets or the stock market may be the most noticeable.

    As for whether prediction markets themselves should consider providing a relatively fairer environment for retail participants and maintaining a more publicly acceptable position for sustainable development, this is a question they should ponder.

    -- Price

    --

    Conclusion

    There are indeed many intriguing questions left, such as whether there will be a prediction market in the future that can challenge Kalshi and Polymarket. If prediction markets worldwide continue to advance in compliance, will each country and region have its own leader (as localized markets can cater better and provide more user-friendly prediction events for their respective nations and regions), and so on.

    Prediction markets are not a new concept, but regulatory compliance in prediction markets is indeed a very new and avant-garde bold attempt. I believe that over time, various issues mentioned in this article will lead to unexpectedly interesting answers.

    This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.

    You may also like

    5 Charts to Understand Crypto Payment Cards: Stablecoins Transition from Blockchain to Real-World Spending

    5 Charts to Understand Crypto Payment Cards: Stablecoins Transition from Blockchain to Real-World Spending

    Ethereum Dominates RWA, While Solana Gains More Space in Trading

    Ethereum Dominates RWA, While Solana Gains More Space in Trading

    Ethereum maintains its leading position in the global market for Real World Asset (RWA) tokenization, while Solana emerges as a major alternative network in the spot trading of these assets.
    Wall Street Conspiracy Theory: Did Waller Intentionally Raise Long-Term U.S. Treasury Yields?

    Wall Street Conspiracy Theory: Did Waller Intentionally Raise Long-Term U.S. Treasury Yields?

    Vitalik Buterin Supports Signal's Phone Number Concealment Feature

    Vitalik Buterin Supports Signal's Phone Number Concealment Feature

    Investigation into Zhou, known as 'Bobby', linked to $10 billion WLFI purchase

    Investigation into Zhou, known as 'Bobby', linked to $10 billion WLFI purchase

    Guren “Bobby” Zhou, identified as the entrepreneur behind Aqua 1, which purchased $100 million worth of WLFI tokens, is still under investigation in a money laundering case in the UK.
    Cryptocurrency in the Second Week of August | Financial Services Agency Standardizes Cyber Attack Reporting Format

    Cryptocurrency in the Second Week of August | Financial Services Agency Standardizes Cyber Attack Reporting Format

    Streaming Platforms: How to Use Your Dollars to Pay Less and Avoid Excessive Taxes

    Streaming Platforms: How to Use Your Dollars to Pay Less and Avoid Excessive Taxes

    Reviewing subscriptions, eliminating duplicate services, and choosing the best way to settle accounts can reduce monthly household expenses.
    Trump and Islamophobia: The Chorus That No Longer Mobilizes Votes

    Trump and Islamophobia: The Chorus That No Longer Mobilizes Votes

    President Trump has maintained his hostile rhetoric and policies towards Muslims, but Islamophobia no longer serves as a political weapon. Muslim voters are divided, Democrats have changed their language, and relations with Arab governments complicate the narrative.
    Situational Awareness Bets US$ 400 Million on Chips After Losing Half of Its Fund

    Situational Awareness Bets US$ 400 Million on Chips After Losing Half of Its Fund

    China Runs Out of Chinese Data to Train AI: The New Wall Is Not Chips

    China Runs Out of Chinese Data to Train AI: The New Wall Is Not Chips

    China faces a new bottleneck in the AI race: the shortage of training data in Chinese. While chips dominate the debate, experts warn that the 1.3% of web content in Chinese could hinder the development of AI models in the country.
    XRP: ETFs Continue to Rise, but the Market Shows Signs of Fragility

    XRP: ETFs Continue to Rise, but the Market Shows Signs of Fragility

    World Liberty received $100 million from businessman investigated for money laundering: NYT

    World Liberty received $100 million from businessman investigated for money laundering: NYT

    Amazon Plans Power Plant That Could Be the Largest Polluter in the U.S.

    Amazon Plans Power Plant That Could Be the Largest Polluter in the U.S.

    XRP Ledger retires 5 amendments, users unaffected

    XRP Ledger retires 5 amendments, users unaffected

    Michael Saylor reveals how ChatGPT helped Strategy unlock $15 billion for its Bitcoin machine

    Michael Saylor reveals how ChatGPT helped Strategy unlock $15 billion for its Bitcoin machine

    Strategy used AI to design preferred stocks like STRC, raising about $10.5 billion through one instrument and roughly $15 billion overall.
    Mario, Pikachu, and Naruto at the Service of the White House: Tokyo Says Stop

    Mario, Pikachu, and Naruto at the Service of the White House: Tokyo Says Stop

    Tokyo criticizes the Trump administration for using Pokémon, Mario, and Naruto without permission in political and military videos.
    Wall Street put $7B into tokenized funds, but under 1% is actually being used in DeFi

    Wall Street put $7B into tokenized funds, but under 1% is actually being used in DeFi

    Nearly $4 billion in tokenized assets now sits inside DeFi, supporting lending, collateral, liquidity, and yield.
    Andrés Neumeyer: "The independence of the BCRA could be the most important anti-inflationary policy of the last 30 years"

    Andrés Neumeyer: "The independence of the BCRA could be the most important anti-inflationary policy of the last 30 years"

    The economist and former Deputy General Manager of Economic Research at the Central Bank (BCRA) argues that the reform of the Organic Charter promoted by President Javier Milei could be key to consolidating the reduction of inflation. He also believes that moderating the economic program would not n...
    AI Security Testing Frequently Crosses Boundaries, Evaluation Environments Become New Risk Points

    AI Security Testing Frequently Crosses Boundaries, Evaluation Environments Become New Risk Points

    Amazon Data Center in Texas: 33 Million Tons of CO2 Annually

    Amazon Data Center in Texas: 33 Million Tons of CO2 Annually

    Strategy teases next Bitcoin move after 1,030 BTC transfer

    Strategy teases next Bitcoin move after 1,030 BTC transfer

    Researchers Showcase Adversarial Patterns to Disrupt Surveillance Recognition

    Researchers Showcase Adversarial Patterns to Disrupt Surveillance Recognition

    What happens when a stablecoin depegs for 30 seconds

    What happens when a stablecoin depegs for 30 seconds

    web3: Firmus Valuation Rises to $10.5 Billion After Transitioning to AI Infrastructure

    web3: Firmus Valuation Rises to $10.5 Billion After Transitioning to AI Infrastructure

    IMF warns local stablecoins could speed dollar adoption

    IMF warns local stablecoins could speed dollar adoption

    King's Cross in London Emerges as a Global AI Startup Hub

    King's Cross in London Emerges as a Global AI Startup Hub

    AI financial advisers carry a hidden Bitcoin bias activated by a single specific switch

    AI financial advisers carry a hidden Bitcoin bias activated by a single specific switch

    A new study found that AI financial advisers treat Bitcoin differently depending on how the same investment task is framed.
    AI Destroys Jobs, But Boosts Stocks: How Long Will This Last?

    AI Destroys Jobs, But Boosts Stocks: How Long Will This Last?

    Crypto is going through a massive dot-com style shakeout as over 100 projects fold in 2026

    Crypto is going through a massive dot-com style shakeout as over 100 projects fold in 2026

    Digital Assets on the Brink of a Bull Market: Similar to the Early 2000s Internet Transition

    Digital Assets on the Brink of a Bull Market: Similar to the Early 2000s Internet Transition

    5 Charts to Understand Crypto Payment Cards: Stablecoins Transition from Blockchain to Real-World Spending

    Ethereum Dominates RWA, While Solana Gains More Space in Trading

    Ethereum maintains its leading position in the global market for Real World Asset (RWA) tokenization, while Solana emerges as a major alternative network in the spot trading of these assets.

    Wall Street Conspiracy Theory: Did Waller Intentionally Raise Long-Term U.S. Treasury Yields?

    Vitalik Buterin Supports Signal's Phone Number Concealment Feature

    Investigation into Zhou, known as 'Bobby', linked to $10 billion WLFI purchase

    Guren “Bobby” Zhou, identified as the entrepreneur behind Aqua 1, which purchased $100 million worth of WLFI tokens, is still under investigation in a money laundering case in the UK.

    Cryptocurrency in the Second Week of August | Financial Services Agency Standardizes Cyber Attack Reporting Format

    ...
    Exclusive new user rewards
    Sign up to get 10 USDT
    Exclusive new user rewardsSign up

    Contents

    Why did the prediction market experience a boom in 2025?
    Why Does the US Government Treat "Prediction Markets" Differently?
    A Haven for Insider Traders?
    P2P
    Conclusion

    Latest articles

    2026/06/10

    Humanity Protocol Security Incident Escalates: More Than $31 Million Stolen From Related Addresses as Attacker Continues Selling H for ETH

    On June 9, according to monitoring by Onchain Lens, more than $31 million has been stolen from addresses linked to Humanity Protocol, and the attack is still ongoing, with the hacker continuously swapping H tokens for ETH. Project founder Terence Kwok later confirmed the security incident on X, saying the issue involved a private key leak.

    ETHETH
    00.00%--
    2026/05/27

    DeFi has reached its most dangerous moment: the real vulnerabilities are not in the code

    April 2026 is not just a security crisis; it is the moment when the industry's mental model completely collapses, and it is also the moment when the protocols that can survive are distinguished from those that cannot.
    2026/05/25

    Vitalik talks about the future of the Ethereum Foundation: a smaller, more distinctive, yet more enduring ship

    Vitalik elaborated on his personal views regarding the transformation direction of the Ethereum Foundation: EF is not "the center of Ethereum," but one of many nodes. With limited resources, EF chooses long-termism over spreading itself thin, focusing on key tasks that "would not happen without EF"—...
    2026/05/22

    IOSG Founder: Please tell Vitalik the truth, let the OGs who have enjoyed the industry's dividends enlighten the young people

    The wage earners freeze to death on the road, the sellers of goods die of thirst on the way. The weavers of brocade wear coarse cloth, and the grain growers do not have enough to eat.
    ETHETH
    00.00%--
    BTCBTC
    00.00%--
    SOLSOL
    00.00%--
    2026/05/21

    Morning Report | Deloitte acquires crypto infrastructure company Blocknative; stablecoin company Checker completes $8 million financing; a16z may have become the largest external institutional holder of HYPE

    Overview of Important Market Events on May 20
    ETHETH
    00.00%--
    GASGAS
    00.00%--
    BTCBTC
    00.00%--
    SOLSOL
    00.00%--
    More

    Latest coin listings on WEEX

    logoCommunity
    iconiconiconiconiconiconicon
    Customer Support:@weikecs
    Business Cooperation:@weikecs
    Quant Trading & MM:bd@weex.com
    VIP Program:support@weex.com
    • About Us
    • Announcement Center
    • Media Kit
    • WEEX Community
    • WXT Zone
    • Announcement
    • Legal Statement
    • Risk Disclosure
    • Terms and Policies
    • Privacy Policy
    • Whistleblower Notice
    • AML/CTF Policy
    • Law Enforcement
    • User Guide
    • Product Launches
    • Crypto News
    • Product Launches
    • Crypto Wiki
    • Learn
    • Q&A
    • Spot
    • Futures
    • Glossary
    • VIP Program
    • Download
    • Affiliate
    • Protection Fund
    • Proof of Reserves
    • Sitemap
    • ETFs
    • Crypto Prices
    • Price Predictions
    • WXT Price
    • BTC Price
    • ETH Price
    • DOGE Price
    • How to Buy Crypto
    • How to Buy WXT
    • How to Buy BTC
    • How to Buy ETH
    • How to Buy DOGE
    • Help Center
    • Fee Schedule
    • Trading Rules
    • WEEX Academy
    • Contact Verifier
    • Submit Feedback
    • About Us
    • Announcement Center
    • Media Kit
    • WEEX Community
    • WXT Zone
    • Announcement
    • Help Center
    • Fee Schedule
    • Trading Rules
    • WEEX Academy
    • Contact Verifier
    • Submit Feedback
    • Customer Support Bot
    • VIP Services
    • Legal Statement
    • Risk Disclosure
    • Terms and Policies
    • Privacy Policy
    • Whistleblower Notice
    • AML/CTF Policy
    • Law Enforcement
    • Proof of Reserves
    • Invite Friends
    • OTC
    • Download
    • Affiliate
    • VIP Program
    • API
    • Broker
    • Listing Application
    • Affiliate T&C
    • Sitemap
    • Futures
    • Spot
    • Copy Trade
    • Markets
    • WEEX Store
    • User Guide
    • Product Launches
    • Crypto News
    • Product Launches
    • Crypto Wiki
    • Learn
    • Q&A
    • Spot
    • Futures
    • Glossary
    • VIP Program
    • Download
    • Affiliate
    • Protection Fund
    • Proof of Reserves
    • Sitemap
    • ETFs
    • Crypto Prices
    • Price Predictions
    • WXT Price
    • BTC Price
    • ETH Price
    • DOGE Price
    • How to Buy Crypto
    • How to Buy WXT
    • How to Buy BTC
    • How to Buy ETH
    • How to Buy DOGE
    • About Us
    • Announcement Center
    • Media Kit
    • WEEX Community
    • WXT Zone
    • Announcement
    • Help Center
    • Fee Schedule
    • Trading Rules
    • WEEX Academy
    • Contact Verifier
    • Submit Feedback
    • Legal Statement
    • Risk Disclosure
    • Terms and Policies
    • Privacy Policy
    • Whistleblower Notice
    • AML/CTF Policy
    • Law Enforcement
    • Customer Support Bot
    • VIP Services
    • Futures
    • Spot
    • Copy Trade
    • Markets
    • WEEX Store
    • Proof of Reserves
    • Invite Friends
    • OTC
    • Download
    • Affiliate
    • VIP Program
    • API
    • Broker
    • Listing Application
    • Affiliate T&C
    • Sitemap
    • User Guide
    • Product Launches
    • Crypto News
    • Product Launches
    • Crypto Wiki
    • Learn
    • Q&A
    • Spot
    • Futures
    • Glossary
    • VIP Program
    • Download
    • Affiliate
    • Protection Fund
    • Proof of Reserves
    • Sitemap
    • ETFs
    • Crypto Prices
    • Price Predictions
    • WXT Price
    • BTC Price
    • ETH Price
    • DOGE Price
    • How to Buy Crypto
    • How to Buy WXT
    • How to Buy BTC
    • How to Buy ETH
    • How to Buy DOGE

    Where new wealth is made

    Download app

    Sign Up
    h5 logo
    Download