Prediction markets prepare to invade one of crypto’s biggest and riskiest trades
A land grab is underway in the US for perpetual futures, one of the biggest and riskiest parts of the crypto trading world, and prediction markets Kalshi and Polymarket reportedly want a piece of it.
Perpetual futures, known to users as “criminals,” are futures contracts with no expiration date that have experienced explosive growth since President Trump returned to office. Prior to this, criminals capable of offering up to 100x leverage did not actually exist in the United States; This is a big reason why offshore exchanges like Binance and the now-defunct FTX are so dominant.
Today, perpetrators account for more than 70% of all volume on centralized crypto exchanges, according to CoinGecko. According to data from CryptoQuant, the transaction volume of criminals in 2025 increased by 29% compared to 2024, reaching a nominal $61.7 trillion. By comparison, spot crypto trading volume reached a nominal $18.6 trillion in 2025, up 9% from the previous year.
The convergence of prediction markets and leveraged trading could reshape the way Americans trade based on real-world events. This will also put prediction markets in direct competition with platforms such as: robinhood And coinbaseand has led skeptics to question whether combining prediction markets with leveraged products would increase volatility and tie crypto more closely with mainstream finance.
However, for established crypto platforms, analysts have largely downplayed the potential risks posed by challenges from prediction markets.
natural lengthening
“I don’t see this as an immediate threat,” said Owen Lau, a Clear Street analyst. “This is a natural product extension for existing customers of Polymarket and Kalshi.… It would be difficult to ask people from Coinbase, Binance or Robinhood to abandon their current platforms and go to: [them]”
Mizuho’s Dan Dolev said the movement in prediction markets was aimed at hedging risk rather than gaining ground.
“Eventually…Robinhood will want to do this on its own,” Dolev said. “So this is more of a defensive move than an offensive move.”
Robinhood launched its Prediction Markets hub last year through a partnership with Kalshi, making it the platform’s fastest-growing product line by revenue, with 11 billion contracts executed by more than 1 million customers by 2025. by company. Coinbase launched its partnership with Kalshi this January.
Dolev said the overlap between the forecast and the crypto markets’ user bases was “tremendous,” making it a “home run idea” for Robinhood to enter. Crypto.com, Coinbase and Robinhood are members of the newly formed Prediction Markets Coalition lobby group.
“Prediction market providers will eventually face the risk of disruption,” he said.
US cracks down on criminals on the ground
If criminal trading becomes popular in the U.S., that could create greater volatility in certain assets, Lau said.
“Because of the leverage, because of the riskiness of this contract, you haven’t seen any criminal contracts in the United States before,” he said.
Criminals outside the US use something called an automatic deleveraging system; This means exchanges automatically liquidate investor positions, causing massive liquidations that trigger large single-day drops in crypto prices. Lau added that perhaps that’s why U.S. regulators weren’t previously comfortable allowing contracts to be traded domestically.
The success of planned expansions will depend largely on how the product is structured—how contracts are priced, concluded, margins determined, and incentivized for investors. Commodity Futures Trading Commission or CFTC, he said earlier this year He said he was working on “true permanent variants” on land.
“The previous administration failed to create a path for these markets to exist onshore,” said CFTC Chairman Michael Selig. prepared statements In that case. “Under my leadership, the CFTC will use the tools at its disposal to develop onshore perpetual and other new derivative products so that these products can thrive in both centralized and decentralized markets, subject to appropriate safeguards.”
At the same time, prediction markets are facing increased scrutiny after recent incidents where bookmakers are alleged to have exploited inside information or manipulated underlying data; such as when traders bet on non-public events or are accused of an allegation. interfering with real-world inputs such as weather sensors – to secure big profits. Add crypto to the mix, and it’s sure to lead to increased scrutiny that hobbles efforts before these companies increase their participation.
But if successful, the real question is whether these contracts made popular in crypto will be expanded to other asset classes. If the CFTC and U.S. operators can continue to prevent the use of automatic deleveraging in criminal trading, that could be a logical next step, Lau said.
“[Perps] “It’s a crypto thing, but it wouldn’t surprise me to see if they want to move in that direction after starting crimes against crypto,” he said. “If they bring this concept to the S&P 500, to energy, to coffee, to Apple shares, it will become a more interesting phenomenon.”
Disclosure: CNBC and Kalshi have a business relationship that includes a minority investment in CNBC.
