Prediction Markets Top $20 Billion Monthly as Geopolitical Betting Surges

Global onchain prediction markets have entered a new phase of growth, with monthly trading volumes surpassing $20 billion for the first time—driven less by crypto price speculation and more by intensifying demand to hedge and interpret geopolitics and policy risk.

According to a new report from blockchain analytics firm TRM Labs, monthly volume across prediction markets surged from roughly $1.2 billion in early 2025 to more than $20 billion by January 2026. Participation has expanded in parallel: TRM Labs estimates about 840,000 unique wallets are now active each month, pointing to a broadening retail and professional user base rather than just larger bets from existing traders.

The composition of activity is shifting as well. TRM Labs found that crypto price-related markets—once a dominant category on major platforms—now represent a consistently small share of flow regardless of user experience level. Instead, markets tied to tariffs, ceasefire scenarios in Ukraine, and China–Taiwan tensions have become the center of gravity, suggesting prediction venues are increasingly being used as a real-time barometer of 'geopolitical risk' and 'policy uncertainty.'

On Polymarket, TRM Labs highlighted the proliferation of tariff-linked markets (116 distinct contracts), alongside clusters of overlapping questions on leadership change probabilities, conflict pathways, and policy event timing. The report argues that this structure disperses trading across multiple related narratives rather than concentrating liquidity into a single all-or-nothing headline bet—an architecture that can deepen engagement but also create thin pockets where pricing may be easier to influence.

That dynamic has coincided with record activity. On Feb. 28, 2026 UTC, Polymarket posted a single-day trading volume of $425 million, eclipsing its previous peak set during the 2024 U.S. election cycle. Over the six months leading into February 2026, TRM Labs said monthly unique wallets nearly tripled to about 840,000—evidence, it argues, of large-scale onboarding rather than a mere upsizing in risk among incumbents.

Sports and entertainment markets are also expanding, though TRM Labs observed that this segment appears more concentrated among intermediate-to-advanced traders and highly skilled market makers. If that trend persists, it could shape how liquidity and pricing quality evolve across categories, particularly as platforms compete for mainstream users.

With scale, however, have come sharper questions about market integrity. TRM Labs said it identified patterns that, in traditional finance, could resemble manipulation: linked wallets entering ahead of major news events, accounts placing a single oversized bet and promptly exiting, and 'thin markets' where a single participant can dominate price action. The firm emphasized that such signals are not definitive proof of wrongdoing, but may indicate areas requiring further scrutiny.

The report’s most prominent case study centered on an Iran-related market earlier this year. TRM Labs said four wallets collectively invested about $40,000 across January and February 2026 in contracts tied to potential U.S. military action involving Iran, ultimately withdrawing approximately $872,000. The wallets, the report adds, were funded within a narrow time window via the same bridge and then rapidly consolidated balances and disappeared after realizing profits. “This does not prove insider trading,” TRM Labs said, but it shows how onchain data can surface anomalies that warrant additional investigation.

Regulatory and institutional tailwinds may be amplifying the sector’s momentum. In January 2026, a newly appointed chair of the U.S. Commodity Futures Trading Commission (CFTC) withdrew a proposal to tighten oversight of prediction markets and issued Polymarket a 'no-action letter,' reducing legal uncertainty around its ability to re-engage with the U.S. market.

At the same time, major capital has started to move in. Intercontinental Exchange (ICE) ($ICE), the parent company of the New York Stock Exchange, announced plans to invest up to $2 billion into Polymarket and executed $600 million of that commitment on March 27, 2026 UTC. Rival platform Kalshi also raised more than $1 billion in a round led by Coatue Management, pushing its valuation to $22 billion.

Looking ahead, gaming and gambling research firm Eilers & Krejcik projected that prediction markets could reach $1 trillion in annual trading volume within the next decade, with sports markets potentially becoming the dominant growth engine and accounting for 44% of total volume over the long run.

As prediction markets evolve from niche betting venues into continuously updated indicators of political and geopolitical sentiment, TRM Labs’ findings suggest the next battleground will be trust—how platforms balance rapid user growth, deeper liquidity, and institutional participation with surveillance, transparency, and enforcement in markets increasingly tied to high-stakes real-world outcomes.