Prediction market trading volume quadrupled to about $63.5 billion in 2025, but structural strains are emerging that could test the sector’s durability in 2026, according to a new report from CertiK.
CertiK said volume rose from $15.8 billion in 2024 as liquidity concentrated around Kalshi, Polymarket and Opinion, with growth driven largely by incentives and event-driven spikes rather than organic demand.
“The key indicators would be persistent price divergence between platforms on the same event that arbitrage doesn’t close,”
CertiK said, warning that fake volume only becomes dangerous once it begins to distort price formation.
The report cited academic research estimating wash trading reached nearly 60% of Polymarket’s reported volume during incentive periods, inflating activity while leaving prices broadly reliable so far.
CertiK cautioned that lower-liquidity markets could become more vulnerable as incentives attract increasingly sophisticated traders and artificial activity grows harder to distinguish from genuine demand.
Beyond market integrity, the firm warned that rapid growth has outpaced security maturity, pointing to risks in hybrid Web2 and Web3 designs that expose platforms to multiple attack surfaces.
Looking ahead, CertiK said prediction markets enter 2026 at a crossroads, with clearer US federal policy offset by unresolved questions around sustainability, state-level regulation and whether platforms can retain users once incentives fade.