Blockchain-driven prediction markets are attracting more investors as traders seek returns that surpass merely holding spot cryptocurrencies, according to a recent report.
Prediction markets are emerging as a new speculative landscape for traders, contrasting casual retail participants with data-informed, professional traders, creating “extreme information asymmetry and significant arbitrage opportunities,” according to a report from crypto research firm 10X Research released on Monday.
While sports betting dominates these platforms, Bitcoin (BTC) and crypto-related events are presenting additional niche opportunities that digital asset traders should not overlook, as per 10X.
“This serves as a valuable reminder that nearly every significant crypto trading platform operates its own market-making or ‘treasury’ desk, not only to provide liquidity but to engage with retail flow, typically without losses,” the company noted.
Related: BTC set for December rebound on ‘macro tailwinds,’ Fed rate cut: Coinbase
For quantitative traders, prediction markets can yield asymmetric payoffs that are advantageous compared to the upside on underlying spot tokens, the report indicated.
For example, traders on the decentralized prediction market Polymarket are betting on whether the BNB (BNB) token will reach $1,500 by December 31, 2025. “Yes” shares on that market were trading around $0.01 recently, suggesting a potential 100x payout if that event occurs. In contrast, a spot BNB holder would experience about a 1.65x gain if the token ascends to that level from current prices.
Related: BitMine acquires $199M in Ether as savvy traders anticipate ETH decline
High win-rate accounts, AI bots raise Insider trading concerns
Nonetheless, some prediction market accounts are showing alarming signs of insider trading, particularly a newly emerged account that earned over $1 million in a single day by betting on Google search trends.
Polymarket user ‘AlphaRaccoon’ generated $1 million by successfully winning 22 out of 23 placed bets, according to crypto investor Haeju.
“This isn’t mere luck. He previously made over $150K predicting the early launch of Gemini 3.0 before the results were available,” he stated in a Thursday X post.
Others are utilizing artificial intelligence bots to enhance their winning chances.
Polymarkt user “ilovecircle” has earned over $2.2 million in the last two months, showcasing a 74% win rate across bets in politics, sports, and cryptocurrency.
The user’s volume and winning consistency “almost guarantees” the use of a machine learning (ML) model for “cross-niche arbitrage and automatic trading,” stated prediction market trader Archive in a Sunday X post.
Magazine: Train AI agents to make better predictions… for token rewards
