[DigitalToday reporter Choo Hyun-woo (추현우)] Prediction markets have grown explosively, with monthly trading volume topping $20 billion.

According to a report by blockchain analytics firm TRM Labs, prediction markets have expanded rapidly, rising 17-fold in six months from $1.2 billion in early 2025. Geopolitical and political issues are driving trading and the crypto-centred market is facing change, blockchain outlet The Block Crypto reported on March 27 local time.

The report analysed that geopolitical conflicts, U.S. politics and macroeconomic events are emerging as the core of trading and are overwhelming the cryptocurrency market. TRM Labs explained: "Prediction markets are not a single narrative, but a structure in which overlapping issues spread trading."

U.S. politics-related contracts account for the top trading markets and continue to wield strong influence. Crypto price forecasts still make up only a small portion, while sports and entertainment betting is actively taking place among mid-level traders and experienced market makers, it said.

Concerns about market manipulation are also growing. TRM Labs pointed to behaviour seen as problematic in traditional finance, such as certain wallets taking positions before major news releases or exiting the market immediately after placing large bets.

For example, in a prediction market on U.S. military action against Iran in early 2026, four wallets turned $40,000 into $872,000, raising suspicions of insider trading. They raised funds through the same bridge, withdrew immediately after winning and then disappeared from the market.

Kalshi and Polymarket have announced measures to regulate access by insiders and strengthen market integrity. As prediction markets grow rapidly and the need for regulation comes into focus, attention is on how institutional responses will unfold.