Polymarket Installs Skyrocket 1,200% While Crypto Bleeds $150B – Are Traders Abandoning Tokens?

Prediction markets are stealing the spotlight as traditional crypto portfolios hemorrhage value. While the broader digital asset space watches $150 billion evaporate, one platform is seeing unprecedented user growth—suggesting a dramatic shift in trader behavior.

The Great Pivot

Forget HODLing. The smart money is moving toward platforms where you can bet on real-world outcomes, not just token price swings. It's a flight to utility—or at least, to a different kind of speculation that feels more tangible than praying for a meme coin to moon.

Signs of a Maturing Market?

A 1,200% surge in installations isn't a fluke; it's a signal. Traders, burned by volatility, are seeking alpha elsewhere. They're bypassing the endless cycle of hype and dump, looking for edges in geopolitics, sports, and current events instead of another dubious decentralized autonomous organization treasury report.

It feels less like a capitulation and more like a diversification. The capital hasn't left the crypto ecosystem—it's just getting redeployed into its more pragmatic, and arguably more entertaining, corners. After all, why bet on a founder's promises when you can bet on whether they'll actually deliver?

The Bottom Line

The narrative is fragmenting. "Crypto" is no longer a monolith of token trading. The surge in prediction market activity reveals a cohort of participants who still believe in blockchain's potential—just not necessarily as a vehicle for the next generic altcoin. They’re voting with their downloads, searching for yield in knowledge over mere momentum. Sometimes the most bullish move isn't buying the dip, but finding a whole new game to play—one where the house edge isn't held by a shadowy group of whales, but by the collective intelligence of the crowd. Or, as any cynical finance veteran would mutter: when the tokens lose their luster, the gamblers simply find a new table.

Weekly trading volume across prediction platforms, including Polymarket and Kalshi, exploded from $500 million in June to nearly $6 billion in January, data from Dune shows, while crypto exchange downloads collapsed by more than half during the same period.

The shift reflects deep fatigue across the token economy afterplunged nearly 30% from its October peak and more than 11 million coins effectively died last year, marking the largest extinction event in crypto history, according to CoinGecko.

According to CoinShares, digital asset investment products shed $1.73 billion in the largest weekly outflow since mid-November 2025, driven by fading rate-cut expectations and persistent bearish sentiment.

Last week, bitcoin spot ETFs also bled $1.62 billion over four consecutive trading days as hedge funds unwound basis trades that now yield below 5%.

Crypto Natives Migrate to Event Betting

Former memecoin traders are leading the exodus toward prediction markets that offer binary odds on real-world events rather than multi-year token roadmaps.

Nikshep Saravanan, who abandoned his digital creator startup to build HumanPlane, a prediction market research platform, said the shift made sense after losing traction without funding.

“Here I can do a lot more with no capital,” the 27-year-old Canadian explained. “There’s so much more interest here.“

Tre Upshaw followed a similar path after losing money on memecoins like SafeMoon, now running Polysights, an analytics dashboard for prediction markets.

“I realized that’s just hyper gambling,” he said. “I got burned so many times on memecoins.”

Yet losses remain widespread across prediction markets too, with 70% of trading addresses showing realized losses, while fewer than 0.04% of Polymarket addresses captured over 70% of total realized profits totalling $3.7 billion.

70% of Polymarket traders lost money while the top 0.04% captured over $3.7 billion in profits, revealing extreme concentration in prediction markets.#Polymarket #Tradershttps://t.co/E5CeFnJIwR

The infrastructure supporting these markets remains fundamentally crypto-powered despite traders fleeing token speculation.

On Polymarket, every key part of trades except order-matching happens on-chain, revealing blockchain technology’s most durable use case yet as belief-driven speculation cools.

Crypto contracts have become the second-busiest trading category on Polymarket, up from fourth place a year ago, with notional crypto volume increasing nearly tenfold across major platforms, according to Dune data.

Exchanges Rush Into Prediction Markets

Major crypto platforms are aggressively expanding into event contracts as user demand shifts.

Coinbase added prediction markets in December through Kalshi routing, with Clear Street analyst Owen Lau projecting the exchange could generate $700 million in prediction market revenue for 2025, while Robinhood’s annual run rate already approaches $300 million.

Gemini and Crypto.com have also launched their own prediction market efforts, with Crypto.com white-labeling services for TRUMP Media.

“As we add more instruments, they tend to complement each other,” said Max Branzburg, Coinbase’s head of consumer and business products, noting the firm has “seen tons of excitement” from users wanting a single venue to trade everything.

A Mizuho survey cited by Bloomberg found that Coinbase and Robinhood users were 9 times more likely to use prediction platforms than the general population.

Polymarket returned to the U.S. market following CFTC approval, launching with ultra-low 10 basis point taker fees and zero Maker fees, the lowest among major platforms according to Clear Street analyst Owen Lau.

Polymarket is back in the U.S. after CFTC approval. Clear Street analyst says prediction markets could become an engagement tool for platforms like Coinbase. #Polymarket #Coinbasehttps://t.co/h9EX7a4YFn

The platform also recently rolled out real estate bets that allow crypto traders to now speculate on housing prices

The company raised $205 million across two funding rounds and secured a $2 billion investment from Intercontinental Exchange at a valuation of nearly $9 billion.

Last month, Kalshi also closed a $1 billion round at an $11 billion valuation and secured CNN as its official prediction markets partner.

Despite near-term outflows, 70% of institutions view Bitcoin as undervalued in a recent Coinbase Institutional and Glassnode survey, and 62% maintain or increase crypto positions since October’s crash.

“Crypto markets are entering 2026 in a healthier state, with excess leverage having been flushed from the system,” said David Duong, Coinbase Global Head of Research.