Prediction Markets Gain Traction as Meme Coin Popularity Fluctuates in Crypto Market
Meme coins experienced significant volatility between 2023 and 2025, with their total market capitalization surging to nearly $22 billion in 2023 and reaching a peak of around $150 billion by December 2024. However, by late 2025, the market cap of meme coins had declined to below $42 billion, accompanied by much lower daily trading volumes.
In contrast, prediction markets have shown rapid growth throughout 2025. Platforms such as Kalshi, Polymarket, and Limitless collectively recorded approximately $44 billion in trading volume, with Kalshi alone achieving about $1 billion in weekly volume. On-chain prediction markets have expanded at an even faster pace; their monthly volume increased from under $100 million in early 2024 to over $13 billion by late 2025—a roughly 130-fold rise. This surge is primarily driven by non-sports markets.
Prediction markets function through yes/no contracts, whose prices imply probabilities and are settled via oracles. This mechanism offers clearer pricing and may present lower risks of market manipulation compared to meme coins. Nonetheless, critics highlight that the capped returns inherent to prediction markets can limit outsized gains for smaller traders, unlike the early-stage opportunities sometimes associated with meme coins.
Industry analysts perceive the rise of prediction markets not as a replacement for meme coins but as indicative of maturation and capital rotation within the cryptocurrency sector. The clarity gained through regulation in certain jurisdictions is fostering demand for structured, event-driven speculative activities.
Overall, the market demonstrates a coexistence between memecoins and prediction markets. Meme coins tend to dominate during periods of hype, while prediction markets attract users interested in probability-based exposure and real-world event linkages.
