About $150 billion (about 200 trillion won) in value has evaporated in a harsh crypto market collapse, as traders move from meme coins to prediction markets covering sports, politics and real-world events. Prediction markets that trade on binary outcomes such as election results, weather and central bank policy are emerging as a new alternative.

According to blockchain media outlet Cryptopolitan on Jan. 26 (local time), Nikshep Saravanan (닉셰프 사라바난), an analyst who used to invest in meme coins and previously worked as a digital creator, has recently been focusing on prediction markets. "As I was trying to grow a business without funding, prediction markets grew explosively," he said. "Even with small capital, you can operate much more efficiently." Saravanan founded Humanplaine, a platform that tracks prediction markets such as elections and sports.

Prediction markets are seen as different from simple gambling. Bitcoin (BTC) has fallen about 30 percent since October last year, and altcoins posted bigger drops, sharply reducing investor interest. Prediction markets, by contrast, provide fast and clear outcomes. Traders are drawn by the ability to see immediate results without complex white papers or long-term roadmaps.

Weekly trading volume on prediction platforms Polymarket and Kalshi surged to $6 billion in January this year from about $500 million in June last year. Both platforms operate on an on-chain basis, and most of the trading process uses crypto infrastructure. That helps explain the rapid growth of prediction markets as volumes on traditional crypto exchanges shrink.

User metrics also support the trend. According to Sensor Tower, Polymarket app downloads jumped to 400,000 from 30,000, and Kalshi rose to 1.3 million from 80,000. Binance downloads, meanwhile, fell more than 50 percent. CoinGecko recorded the disappearance of about 11 million coins in 2025, calling it the biggest "extinction event" in crypto history. The altcoin market lost about $150 billion in value from the end of 2024 to the end of 2025, and liquidity shrank sharply due to large-scale forced liquidations during the plunge in October last year.

Saravanan said the crypto market has built up fatigue due to liquidity removal and excessive competition. Upshaw (업쇼), a trader who suffered losses investing in the meme coin Safemoon, also moved to prediction markets. "Meme coin investing was too much like gambling," he said. "Prediction markets are a relatively better alternative."

Still, not every investor succeeds in prediction markets. Data from DeFiOasis.eth show about 70 percent of prediction-market trading addresses recorded losses.

The boundary between crypto and prediction markets is increasingly blurring. Polymarket and Kalshi allow forecasts of bitcoin prices, and crypto-related contracts have become the second most-traded category. CoinMarketCap also introduces prediction markets as a separate section on its website.

Large exchanges are also entering the space. Coinbase introduced prediction markets in December last year, with trading carried out through Kalshi. Gemini and Crypto.com launched similar products, and Crypto.com provided a customised prediction service for Trump Media. Coinbase's Max Branzburg (맥스 브랜즈버그) said users want everything in one platform.

Financial analyst Owen Lau (오웬 라우) forecast that Coinbase could generate about $700 million in revenue from prediction markets in 2026. Robinhood is already earning about $300 million a year, and a Mizuho survey showed Coinbase and Robinhood users use prediction markets 9 times more than the general public. Coinbase is stepping up its expansion in prediction markets through its acquisition of The Clearing Company.

Upshaw said investors who remain in crypto are also using on-chain prediction markets in parallel. "The market is changing, but traders are still looking for opportunities," he said.