Prediction Markets Surpass $20B Monthly as Geopolitics Pulls New Traders

Prediction markets have entered a new growth phase. A TRM Labs report says monthly trading volume rose from about $1.2B in early 2025 to more than $20B by January 2026. Active participation also jumped, reaching roughly 840,000 active wallets per month by February 2026. The key shift is who is driving the growth. TRM Labs reports that unique wallets tripled over six months, indicating more new users—not just heavier activity from existing traders. The firm links adoption to easier access via blockchain rails, lower transaction costs, and broader visibility through integrations and partnerships (including Kalshi). In parallel, the main driver of Prediction markets activity has moved toward geopolitics. TRM Labs says global conflicts, elections, and macro events now account for most trading across prediction markets, while crypto-focused questions represent a smaller share. Single markets tied to potential US strikes against Iran reportedly drew tens of millions in volume, with similar spikes across multiple geopolitical contracts. However, the report flags emerging manipulation concerns. It notes wallet clusters placing similar bets ahead of major events and exiting positions in sync—patterns that raise questions but do not prove misconduct. TRM Labs also points out that platforms have started restricting users with non-public information, while regulation frameworks remain unclear. For traders, Prediction markets’ growth and mainstreaming could increase liquidity and signal flow in the short term, but manipulation risk may heighten volatility around major news headlines.