Retail users are the ones driving most activity in prediction markets, which is making them one of the most active onchain apps. This is happening despite moderate participation throughout much of the digital asset market.
More than 80% of customers were classed as retail, meaning they traded less than $10,000. In March, monthly trading volume hit $25.7 billion, according to a recent analysis from Bitget Wallet and Polymarket.
Retail Dominance Fuels Rapid Growth
The numbers line up with what Dune Analytics found, which shows that March trade volume was $23.7 billion, up from $1.9 billion the previous year.
The analysis suggests that there has been a more widespread change in the way prediction markets are used. Users are coming back more often and interacting across many categories, instead than concentrating on one-off, high-profile events. During the first quarter, the average number of active days per user almost doubled, going from 2.5 to 9.9. This suggests that users were more engaged and consistently used the service.
The consistent availability of athletic events throughout the world propelled sports to the top of the market, with $10.1 billion in trading volume during the quarter. During the same time frame, $5 billion changed hands in the political markets.
Prediction markets are undergoing a transformation from episodic betting to a more continuous system that tracks real-world changes, according to the research. Users are increasingly relying on crypto wallets as crucial access points.
One of the leading platforms in the industry, Polymarket, runs on Polygon, enabling users to make onchain bets on actual events without the need for middlemen. In contrast, centralized markets are run by platforms like Kalshi.
The paper cites industry estimations that indicate the prediction market might reach $240 billion this year, with longer-term forecasts indicating that it could surpass the trillion-dollar threshold.
Its trajectory is now more plausible. Early adopters like Polymarket and Kalshi have reaped the rewards of the prediction markets’ meteoric rise since the 2024 US presidential election. It has been claimed that both platforms are seeking a significant amount of funding, with valuations above $20 billion.