Are crypto traders slowly moving to prediction markets?

[DanWalker]

If this trend continues, do you think crypto trading volume could eventually be affected, or prediction markets are still too small to make that kind of impact?

In my opinion, portion of retail trader may lean toward prediction market in short term.
But I don’t think it will have any major negative impact on crypto trading volume in long term.

Why?

Because there is huge liquidity and leverage gap here.
Leverage is main fuel for billion dollar day-to-day volume generated on Bybit, Binance, Hyperliquid etc. This leverage is sometimes up to 10x, 50x or 100x.

Other hand, prediction market like Polymarket or Kalshi work like binary option.
Here there is only Yes vs No or $0 vs $1 sentiment.
Liquidity depth here is not yet as deep as on centralized or decentralized crypto exchange.

So prediction market will not kill crypto trading any way. Rather, it will complement it.

[AmaGold70]

Trading cryptocurrency, and gambling are two similar things more especially when it comes to risk. When you invest in cryptocurrency , the only way you can be hopeful of making profit a little is when you are patient with that investment, unless is Bitcoin which the long term profit is sure. In the case of gambling, it is something you get the profit immediately especially if your bet is successful, but gambling also carries considerable level of risk because making profit from gambling is not equally very certain. Now it is true that some cryptocurrency investors are actually gambling for fast profit, but then, there is not guarantee from cryptocurrency traders making profit from gambling because of the risk involved.

[Fortify]

This topic is quite interesting because reportedly, some crypto traders are now moving to prediction markets. One reason is that crypto sometimes takes time before the market really moves, while prediction markets always have different events going on, so traders can keep trading if they want. If they are good at analyzing those events, they can also make money there.

This makes me wonder what could happen to crypto trading volume if more active traders move to prediction markets. Maybe instead of day trading crypto, some people will just hold their coins, then use prediction markets for their short-term trading activity.

If this trend continues, do you think crypto trading volume could eventually be affected, or prediction markets are still too small to make that kind of impact?

People in the trading business will always be quick to find the latest trends and will gravitate to new markets if it's profitable enough. However it's not the only factor in play as most of these big prediction markets are based in the USA which means they're subject to local reporting requirements and lots of these traders like to stay in a gray area when possible to maximize their profits. Binance is quite a big trading platform, that's based on the Middle East and is likely less likely to share your details with tax authorities or government agencies who might try to prosecute you for different reasons, which is where it gains some advantage. If the profit margins are better or it can offer something else like higher liquidity then traders are likely to move there eventually, but there might always be others who stay away from American businesses.

[Odohu]

I don't see any direct correlation between crypto trading and the prediction market and if you ask me, crypto trading should be easier than the prediction market. The reason is simple, trading is more organized and have a lot of literatures covering the experiences of others and this can serve as reference for people to study and sharpen there skills. This is not the same with prediction market, hence the reason I consider it riskier than trading. Therefore, prediction market is not a threat to crypto trading.

You’re on board. I’m not much of a trader though, but I know that trading is a lot more organized than the prediction market, and even gambling.

Well, I think the opposite. If we were talking about Bitcoin alone, that would be one thing, but “crypto” trading? For the vast majority of users, it’s like going to a casino—no matter how much some people try to analyze it with charts, candlesticks, and so on. The volatility and unpredictability are so high that they further reduce the already slim chance of consistently making a profit compared to more traditional, less volatile forms of trading, like the stock market.

So, it makes sense to me that a percentage of those users are switching to prediction markets, because no matter how much they try to hide it, it’s just another new form of gambling—a growing market with new types of bets that’s attracting more people.

You may be right that trading asset like Bitcoin can be difficult but that does not mean that people are not making a living from it. You just have to go for the proper strategy and imbibe proper trading psychology and you will be fine. There is a popular saying in trading that "the candle stick is one and the same for all markets" which means the price action follow the same pattern.

It is also very wrong to  compare trading to gambling because gambling is more of luck while trading is more of skills, they are different in many ways.

[asriloni]

If this trend continues, do you think crypto trading volume could eventually be affected, or prediction markets are still too small to make that kind of impact?

I think the crypto trading volume would not be affected. The prediction market becomes hot for individual, but the volume is declining from 800m to less than 600m, which is showing the opposite trend. I meant about the article said that for the individual trade, and i translate it as someone who has small volume trade like 100 bucks or lower.

In comparison to the daily volume trade for surged from less than 20b to close 30b. We can conclude the growth of individual trade demand in prediction market gives no impact to the crypto trading.

Those people who do personal gambling in prediction market are only using tiny amount of money.

[Doan9269]

I don't think this is possible for any reasonable trade that will go into projection market when it is even more at risk to do than trading, but due to the increasing rate of some platforms engaging prediction markets, I don't know how comfortable some are into doing things like this, but I know that there will soon clear their doubt in seeing the difference between trading and prediction market and which one is more profitable to stay with and the one to completely avoid doing, you tend to not believe on some things until you experience it yourself.

[Bluedrem]

Crypto trading and prediction market are pretty much the same. When a person trades in crypto currency, he has to predict the price of that crypto currency. Those who can make correct predictions can profit by trading here. Similarly, people are making money these days by predicting other things, in this case we can talk about poly market where predictions are made on various historical events including wars and bets are placed on them.
For some time now, there has been a lot of talk about various betting on poly market where many people have won money by betting on some historical events by creating new accounts.

[Odusko]

I don't see any direct correlation between crypto trading and the prediction market and if you ask me, crypto trading should be easier than the prediction market. The reason is simple, trading is more organized and have a lot of literatures covering the experiences of others and this can serve as reference for people to study and sharpen there skills. This is not the same with prediction market, hence the reason I consider it riskier than trading. Therefore, prediction market is not a threat to crypto trading.

There is direct correlation between trading crypto and predictions market, I have received few notifications from my trading app which is an exchange app to go on and predict the price of Bitcoin and if it goes my way that means I won and earn my profits, most crypto traders are good at making day trade analysis which make it easier for them to make use of predictions market to earn an incentive along the way as the crypto price keep changing.

[o48o]

I don't see any direct correlation between crypto trading and the prediction market and if you ask me, crypto trading should be easier than the prediction market. The reason is simple, trading is more organized and have a lot of literatures covering the experiences of others and this can serve as reference for people to study and sharpen there skills. This is not the same with prediction market, hence the reason I consider it riskier than trading. Therefore, prediction market is not a threat to crypto trading.

I totally see the correlation. It's greedy people wanting to get rich quick.

It has only been few years since real traders have been integrating cryptos to their trading. Before it, the whole scene was just basically "degen gamblers" going in to something without any research just because they speculated that there's potential. And that's still happening. People doing that are very similar to gamblers. And unlike in sports gambling i don't think there's even a house edge in prediction markets, so people could in theory make calculated guesses, which can be even more accurate and profitable then in trading.

[ruykeri]

I don't see any direct correlation between crypto trading and the prediction market and if you ask me, crypto trading should be easier than the prediction market. The reason is simple, trading is more organized and have a lot of literatures covering the experiences of others and this can serve as reference for people to study and sharpen there skills. This is not the same with prediction market, hence the reason I consider it riskier than trading. Therefore, prediction market is not a threat to crypto trading.

I also think that crypto trading will remain popular. But if the number of users in the prediction market increases, then I can say with some certainty that the importance of crypto trading will decrease to the user. And what I think is that those who are trading in crypto are now being manipulated in the market. Because altcoins have controllers, they have the power to manipulate the market. If the price of the token increases, the tendency to increase or decrease the token supply . All these things are now considered scams by traders. So there may be a logical reason for this, for which people are leaning towards the prediction market, which can be called a kind of gambling, where they are predicting on uncertainty, the result can be anything. The prediction market is creating a different kind of speculation for them. Instead of predicting on the price movement of a token, they can predict on elections, sports, economic data. It may be becoming more popular with many people now.

[xenomorfo]

Trading cryptocurrency, and gambling are two similar things more especially when it comes to risk. When you invest in cryptocurrency , the only way you can be hopeful of making profit a little is when you are patient with that investment, unless is Bitcoin which the long term profit is sure. In the case of gambling, it is something you get the profit immediately especially if your bet is successful, but gambling also carries considerable level of risk because making profit from gambling is not equally very certain. Now it is true that some cryptocurrency investors are actually gambling for fast profit, but then, there is not guarantee from cryptocurrency traders making profit from gambling because of the risk involved.

definitely very similar, they have no differences except for the fact that at least gambling is a fun game that lets you pass the time
Where's the fun in trading? i don't think there's any fun in it other than losing money
I've never seen anyone get rich.

[henmark]

Trading cryptocurrency, and gambling are two similar things more especially when it comes to risk. When you invest in cryptocurrency , the only way you can be hopeful of making profit a little is when you are patient with that investment, unless is Bitcoin which the long term profit is sure. In the case of gambling, it is something you get the profit immediately especially if your bet is successful, but gambling also carries considerable level of risk because making profit from gambling is not equally very certain. Now it is true that some cryptocurrency investors are actually gambling for fast profit, but then, there is not guarantee from cryptocurrency traders making profit from gambling because of the risk involved.

Yeah, but now some sites are offering insane leverage trading options such as 1000x, which is literally gambling because you either get liquidated in the next 5 mins or double-quadruple your money in the same timeframe.

I saw some kick streamer talking about a new site moon (not promoting btw, I don't know how legit it is) which is extremely close to how Stake looks and the support team appears to be the same. So maybe it's a product from Stake as well? And that tells us how they feel about the gambling shift. I do think though, that trading is any day better than gambling because at least you learn something about the market even when you are losing money. In gambling, you just learn nothing and get addicted over time.

[Stepstowealth]

This topic is quite interesting because reportedly, some crypto traders are now moving to prediction markets. One reason is that crypto sometimes takes time before the market really moves,

There are traders who are comfortable with the speed at which the crypto market moves and because they've learned to exercise patience on the highest level they're usually not in a hurry to look for alternatives when the market is slow. This is why I feel that no matter the number of persons who are now moving into prediction markets for the reasons that you stated, there will still be crypto traders who would hang on to the crypto market because it is what they used to even if the market slows down. Most of these traders who usually are patient with the market are traders with well experienced to know that this is what happens often in the market where there are times where the market moves quickly and other times where the market becomes slow.

[Junii]

This topic is quite interesting because reportedly, some crypto traders are now moving to prediction markets. One reason is that crypto sometimes takes time before the market really moves, while prediction markets always have different events going on, so traders can keep trading if they want.

I don't think so actually some people doing gambling while calling it trading. Buying crypto is investment and investment takes time and require patience. You said majority of traders moves to prediction market and i bet in those people which you mentioned majority of them are the ones who losses more money here and also they are not good in analyzing the market that is why they are finding easy ways which gives them instant result without doing a lot of research and there brain gets those adrenalines and dopamine while gambling.     

prediction markets for their short-term trading activity.

If they need quick income the future trading still available which is less risky then prediction market.

If this trend continues, do you think crypto trading volume could eventually be affected, or prediction markets are still too small to make that kind of impact?

Prediction market are still too small and it takes a lot of time if this happened currently didn't see any chances.

[Chinesebaby]

This topic is quite interesting because reportedly, some crypto traders are now moving to prediction markets. One reason is that crypto sometimes takes time before the market really moves, while prediction markets always have different events going on, so traders can keep trading if they want. If they are good at analyzing those events, they can also make money there.

This makes me wonder what could happen to crypto trading volume if more active traders move to prediction markets. Maybe instead of day trading crypto, some people will just hold their coins, then use prediction markets for their short-term trading activity.

If this trend continues, do you think crypto trading volume could eventually be affected, or prediction markets are still too small to make that kind of impact?

Source:
https://www.wsj.com/finance/currencies/for-many-individual-traders-prediction-markets-are-hotand-crypto-is-not-bef27e3d

Prediction market is the new trend currently in the crypto industry, and for that reason I'm definitely not surprised seeing lots of crypto traders jumping into it since it always have events to place a bet on unlike the market that its volatility have not been consistently volatile lately. And for the fact that these traders now focus on crypto trading doesn't mean that they will abandon crypto trading for good, because everything has season and same as crypto trading. And for the fact that the market have not been bullist few months ago and traders left trading for prediction markets don't mean they will stilll stick to prediction market when the crypto market starts becoming more bullish.

[Z_MBFM]

There is no relationship between Crypto trading and prediction market. The analysis and predictions made by those who trade are completely different from the prediction market, so it cannot be said that traders will easily and quickly move towards the prediction market. However, since various resources are available online and many things are constantly coming forward, in that case, someone can move towards the prediction market. However, I do not believe that those who trade will gradually move towards the prediction market. However, those who gamble regularly can gradually move towards the prediction market because the prediction market works a lot like gambling. But trading is not gambling.

[Zlantann]

There is no relationship between Crypto trading and prediction market. The analysis and predictions made by those who trade are completely different from the prediction market, so it cannot be said that traders will easily and quickly move towards the prediction market. However, since various resources are available online and many things are constantly coming forward, in that case, someone can move towards the prediction market. However, I do not believe that those who trade will gradually move towards the prediction market. However, those who gamble regularly can gradually move towards the prediction market because the prediction market works a lot like gambling. But trading is not gambling.

OP is saying that people are leaving trading for gambling. I don't know why the law and people are separating the prediction market from gambling. I know many people who make a living from full-time crypto trading, but this is not the case with gambling. The prediction market depends more on time and chance. It is not like crypto trading, where the market can be analyzed and predicted. Traders who move from the crypto industry to gambling should be careful about losing their capital since they are taking higher risks.

[skarais]

Trading cryptocurrency, and gambling are two similar things more especially when it comes to risk. When you invest in cryptocurrency , the only way you can be hopeful of making profit a little is when you are patient with that investment, unless is Bitcoin which the long term profit is sure. In the case of gambling, it is something you get the profit immediately especially if your bet is successful, but gambling also carries considerable level of risk because making profit from gambling is not equally very certain. Now it is true that some cryptocurrency investors are actually gambling for fast profit, but then, there is not guarantee from cryptocurrency traders making profit from gambling because of the risk involved.

Trading and gambling are different, even if some people have the same approach to both. Most people gamble because they want to have fun, but winning money is another goal that is disguised. Meanwhile, the trader has only one goal, it is profit and it feels just that. You say the risks are the same, but I think the risks of both are completely different. When you are all in on a single bet, then the chances that you will get only two, it is win or lose. You will not lose everything on a trade, I mean you can still minimize the risk of loss and set a loss limit even if you are all in.

[Filicius]

That makes sense, because not all crypto traders are really doing serious analysis, some are basically gambling already. So for them, moving to prediction markets could even be more exciting because there are many different things to trade, sports, politics, weather and other events.

It is an old controversy on the forum with defenders and detractors, that some traders, especially intraday, actually what they do is bet or gamble instead of investing, and on that side, it would seem reasonable for prediction markets to function as substitute services. Depending on the hype they are given on social networks, younger people may see these markets as something more novel and current, compared to cryptocurrency trading, which could be seen as something more outdated (I never thought I would say this).

Many of us who have been here for a while are aware of the risks of prediction markets, in which you not only bet your money, but often compete against other bettors with more information than you, but the younger and less critical ones probably don't care about this and simply go with the trend of the moment.

[Bright0515]

I think there is a difference when it comes to trading and the prediction market, even though there are some similarities the differences outweighs them. The prediction market is more of prediction and crypto trading has do with proper analysis, so I guess if any trader movees to thr prediction market it is just for the purpose of gambling and not really to trade. Making use of the prediction market as a trader means you are not trading at that point in time, that's actually gambling because this is just reliance on luck.