Blockchain-based prediction markets are attracting a growing wave of speculators as traders search for returns that outperform simply holding spot cryptocurrencies, a new report shows.
According to a Monday note from crypto research firm 10X Research, these platforms are evolving into a speculative battleground where casual retail bettors face off against data-driven professionals—creating “extreme information asymmetry and meaningful arbitrage windows.”
Sports wagers still dominate volumes, but Bitcoin- and crypto-related event markets are carving out niche opportunities that digital-asset traders increasingly find hard to overlook, the report said.
“It’s a timely reminder that nearly every major crypto trading venue has historically run its own market-making or ‘treasury’ desk—not only to offer liquidity, but to position itself against retail flow, and rarely at a loss,” 10X added.
For quantitative traders, prediction markets can deliver asymmetric payoffs that often compare favorably with the potential upside of holding the underlying spot tokens, the report noted.
As an example, traders on the decentralized platform Polymarket are wagering on whether BNB will reach $1,500 by Dec. 31, 2025. “Yes” shares for that outcome recently traded near $0.01, suggesting a possible 100x return if the target is hit. By contrast, a spot BNB investor would see only about a 1.65x gain if the token rose to the same level from current prices.
High win-rate accounts and AI bots spark insider-trading concerns
But some activity on these markets has raised red flags. A newly surfaced prediction market account reportedly earned more than $1 million in a single day by betting on Google search trends—fueling speculation about insider access or the use of powerful AI-driven strategies.
Polymarket user “AlphaRaccoon” secured the windfall after winning 22 of 23 wagers, according to crypto investor Haeju.
“This isn’t a lucky streak. He previously made more than $150K by predicting the early release of Gemini 3.0 before results were public,” Haeju wrote in a Thursday post on X.
Other traders appear to be using AI-driven bots to boost their odds of winning.
Polymarket user “ilovecircle” has reportedly earned more than $2.2 million over the past two months, maintaining a 74% win rate across bets spanning politics, sports, and crypto.
The scale and consistency of those winnings “almost guarantees” the use of a machine-learning model for “cross-niche arbitrage and auto-trading,” prediction market trader Archive wrote in a Sunday post on X.
