Blockchain-based prediction markets are attracting more speculators, as traders look for returns beyond simply holding spot cryptocurrencies, according to a new report.
Prediction markets are emerging as a new speculative arena for traders, pitting ordinary retail trading participants against data-driven professional traders, creating “extreme information asymmetries and meaningful arbitrage windows.” According to According to a report released Monday from cryptocurrency research firm 10X Research.
While sports betting accounts for the lion’s share of activity on these platforms, Bitcoin (Bitcoin) and events related to cryptocurrency results provide more niche opportunities that digital asset traders cannot ignore, according to 10X.
“It is a valuable reminder that almost every major cryptocurrency trading venue ran its own market-making desk or ‘treasury,’ not just to provide liquidity, but to stand on the other side of the hash flow, rarely taking a loss,” the company wrote.
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For quantitative traders, prediction markets can offer asymmetric returns that compare favorably with the upside of the underlying spot tokens, the report noted.
For example, traders in the decentralized prediction market Polymarket are Bet About whether BNB (BNB Bank) The token will reach $1,500 by December 31st. Yes shares have recently traded in this market at around $0.01, meaning a 100x payout potential if the event occurs. In comparison, a BNB spot holder would see gains of approximately 1.65x if the token rose to the same level from current prices.
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High win rate accounts and AI bots raise concerns about insider trading
However, some market forecast accounts are showing troubling signs of insider trading, particularly a recently surfaced account that made more than $1 million in a single day by betting on Google search trends.
Polymarket user AlphaRaccoon made $1 million by successfully winning 22 out of 23 bets, according to cryptocurrency investor Haeju.
“This is not a lucky streak. He previously pocketed $150k+ anticipating the early release of Gemini 3.0 before the results came in,” he wrote in Thursday’s X mail.
Others use AI bots to increase their chances of winning.
Polymarket user ilovecircle has earned more than $2.2 million over the past two months, achieving a win rate of 74% across bets spanning politics, sports, and cryptocurrencies.
The user’s volume and consistency of winning “almost guarantees” that he is using a machine learning (ML) model for “cross-niche arbitrage and automated trading,” the Predictive Market Traders Archive wrote in Sunday X. mail.
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