Prediction Markets Grew 4X to $63.5B in 2025, But Risk Structural Strain: CertiK
Prediction markets saw trading volumes quadruple in 2025, rising from $15.8 billion in 2024 to $63.5 billion, with most activity concentrated on Kalshi, Polymarket, and Opinion. This boom has been fueled largely by incentives and event-driven spikes rather than organic growth, raising doubts about long-term sustainability. Artificial activity such as wash trading, notably peaking at 60% of Polymarket's reported volume, has inflated liquidity metrics but, so far, has not systematically distorted market prices or forecasting accuracy. CertiK warns that real systemic risk would appear if fake volume begins to skew price formation, evidenced by persistent price anomalies or manipulation not corrected by arbitrage. Security remains a major concern, as rapid sector growth has outstripped infrastructure maturity. A December 2025 exploit of a third-party login service used by Polymarket demonstrated that vulnerabilities in authentication can endanger user funds even with secure smart contracts. CertiK advises holistic security audits and notes that the sector’s future depends on platforms maintaining genuine user engagement, adapting to evolving regulations, and ensuring structural robustness as they scale.
