Prediction markets exceeded $20 billion in monthly trading volume for the first time, marking a sharp expansion in event-driven speculation. The surge reflects a shift toward geopolitics and macro events as primary drivers of onchain trading activity.
Volume has risen from $1.2 billion in early 2025 to over $20 billion, while unique wallets tripled to 840,000 in the six months through February 2026, according to TRM Labs. Activity increasingly concentrates on platforms such as Polymarket, where users trade outcomes across political, economic, and cultural events.
Are Geopolitics Now The Core Driver Of Volume?
Geopolitical events and U.S. political developments now account for the majority of trading, overtaking crypto-native markets that once dominated these platforms. Trading volume fragments across multiple overlapping contracts, particularly around conflict scenarios and leadership outcomes, rather than consolidating into single high-liquidity markets.
This shift contrasts with earlier cycles where crypto price speculation drove most activity, with such markets now representing a smaller share across all user segments. Sports and entertainment contracts remain active but tend to peak among experienced traders rather than new entrants.
TRM Labs identified three dominant strategies among the most profitable participants: macro conviction, algorithmic market-making, and event-driven opportunism. The top wallet generated $6.2 million across diverse contracts, including central bank decisions and election outcomes, while six of the ten highest-earning wallets traded daily over an 80-day period.
Still, the report flagged behaviors resembling market manipulation, including coordinated wallets entering positions ahead of major events and exiting immediately after resolution. In one case, four wallets turned $40,000 into $872,000 betting on U.S. military action scenarios, raising questions about information asymmetry. Will enhanced integrity measures be enough to address these risks? Platforms including Polymarket and Kalshi have introduced new controls, making enforcement outcomes the next key variable to watch.
