Major cryptocurrency exchanges, including Blockchain.com and Binance US, are rushing to launch prediction markets in the United States. According to the Financial Times, these digital asset platforms are actively applying for regulatory licenses to offer event-based contracts.
These exchanges are moving into prediction markets because trading activity has slowed down. Investors are trading Bitcoin and Ethereum less frequently than before, leaving exchanges with lower fee income.
Crypto exchanges are racing to offer US customers prediction markets, turning event odds into a tradable crypto product. The pitch is Polymarket-style 0-100 cent pricing where the share price is the implied probability and each contract settles at $1 or $0. 1/2
— StockDuty (@stock_duty) October 21, 2026
To make up for lost revenue, these exchanges are launching new products to attract customers and stay profitable. This move from cryptocurrency trading to event betting has drawn sharp observations from the online trading community.
Online commentator MrBcryptooo captured the raw reality of the situation, saying the move shows that crypto trading activity has slowed down
@Cointelegraph Exchange pivoting to betting tells u everything about volumes rn
— Mr B (@mrBcryptooo) October 21, 2026
User hatzimi supported this sentiment, adding that crypto exchanges could soon start looking more like betting platforms than places to trade cryptocurrencies.
@Cointelegraph give it a year and every crypto exchange is a sportsbook with a different logo
— Mimi | SWBZ (@hatzimi) October 21, 2026
READ ALSO: CFTC Plans New Prediction Market Rules That Could Reshape Polymarket and Kalshi
What is behind the huge rise in prediction market trading volume?
Over the past 30 days, total prediction market volume surged 24 per cent, jumping from $17.3 billion to $21.5 billion. Instead of buying digital coins, traders are buying “yes” or “no” shares based on the outcomes of sports, politics, and economic events.
Prediction market volume rose 24% over the past 30 days, from $17.3B to $21.5B.
From sports and politics to crypto events, traders are using market prices to bet on different outcomes.
Where is the growth coming from? 🧵👇 https://t.co/5SQ2ictIu6
— CertiK Skynet (@CertiKCommunity) October 21, 2026
In cryptocurrency markets, investors make money only when a token’s price moves upward. However, prediction markets offer fast-paced action with deadlines. A trader can bet on whether a political debate will happen on a Tuesday and receive a guaranteed cash payout by Wednesday morning, completely bypassing the need for a crypto bull run.
Also, prediction markets allow everyday people to directly monetize their news consumption. People spend hours every week reading headlines and debating current events on social media. Prediction markets allow them to turn that personal knowledge into cash. If a user believes they know exactly what the Federal Reserve will do with interest rates next week, they can buy shares in that outcome, effectively turning their daily news reading into a highly profitable hobby.
US challenge crypto prediction markets over gambling laws
As crypto companies launch these new betting products, they face legal battles over whether their platforms count as illegal gambling.
While federal agencies oversee national financial derivatives, states enforce their own anti-gambling laws. User Krisz0310 commented on this structural threat, noting that regulation is a major challenge for prediction markets.
@Cointelegraph Makes sense. Trading volume dries up in a slump, but people never stop betting on outcomes. The real question is regulation, with Utah already suing Kalshi.
— Krisz | Kickoff & Candles (@krisz0310) October 21, 2026
The legal battle over prediction markets is spreading across the United States, with several states suing platforms they accuse of operating illegal gambling businesses. In October 2026, Utah Attorney General Derek Brown sued Kalshi, seeking to recover up to $60 million in fees collected from local users. New York has also sued Kalshi, accusing it of offering gambling services without a state license and seeking damages reportedly totalling $36 billion.
Other prediction market platforms are facing similar action. In September, New York sued Polymarket, alleging that its sports contracts amount to illegal gambling. The company responded with its own lawsuit, arguing that federal regulators, rather than state authorities, have the power to oversee its markets. In April, Wisconsin sued Crypto.com, Robinhood, and other platforms over their prediction market offerings. The state argued that their event contracts violated its gambling laws. The Commodity Futures Trading Commission later sued Wisconsin, arguing that federal law gives it authority over these financial products.
This lawsuit highlights potential stumbling blocks for cryptocurrency exchanges trying to pivot into the prediction space. They must now navigate 50 different state regulators, each with the power to classify the market as an illegal sports bet.
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