The prediction market has seen a noticeable shift in dynamics for the first time in several months. In April, trading volume on Polymarket dropped by about 8.9%, marking the first monthly decline in activity since August last year.
According to Dune Analytics, Polymarket and its related American app processed about $10.2 billion in trading volume compared to over $11.2 billion in March. At the same time, the overall prediction market sector continued to grow.
Kalshi Starts Taking Market Share
While Polymarket was losing momentum, the American platform Kalshi showed the opposite trend. In April, its trading volume grew by about 13% and reached around $14.8 billion.
As a result, the combined prediction market continued to expand. Total sector trading volume rose from $26.5 billion to nearly $29.8 billion in one month.
This is an important signal for the industry. The decline in Polymarket does not mean waning interest in the prediction market overall. Rather, it points to a redistribution of liquidity among platforms.
Polymarket Faces Stronger Pressure
The company is currently in a challenging phase. Polymarket is trying to return to the US market after CFTC restrictions, but at the same time is facing increased scrutiny from regulators and politicians.
After the 2024 presidential election, prediction markets surged in popularity. The sector began to develop rapidly, especially around political bets, geopolitics, and macroeconomic events.
This is exactly what attracted the attention of authorities. In the US, there is growing discussion about the risks of insider trading, especially in contracts related to wars, energy, and government decisions.
Competition Is Getting More Aggressive
Just a year ago, Polymarket almost dominated the crypto prediction market segment. Now the situation is changing.
New players are entering the market with their own trading models and AI tools. The Prophet platform recently launched a system where artificial intelligence itself acts as the counterparty in trades, using real capital.
MoonPay has also introduced AI tools for trading on prediction markets. This shows that the market is gradually turning not just into a betting venue, but into a separate technology segment within the financial industry.
The US Market Remains the Main Prize
Polymarket left the US back in 2022 after an agreement with the CFTC. At that time, the platform was banned from serving US users on the global version of the exchange.
The company is now trying to return gradually. At the end of 2025, Polymarket launched a separate app for US clients, but it operates separately from the international platform and does not use shared liquidity.
This limits the service’s competitiveness. While Kalshi operates within a regulated US model, Polymarket is forced to build a more complex access structure.
Politicians Step Up Pressure on Prediction Markets
At the same time, political resistance to the industry is growing. In March, Senator Elizabeth Warren and more than 40 members of Congress sent a letter to the CFTC demanding tighter control over prediction markets.
The main concern is potential insider trading. Lawmakers fear that officials or people with access to confidential information could use the platforms to profit from events related to government decisions.
Some states are also beginning to attack the sector through local betting laws. The Wisconsin Attorney General has already filed lawsuits against Kalshi, Polymarket, and other platforms, claiming that their activities violate sports betting regulations.
Prediction Markets Are No Longer a Niche Market
Despite the pressure, the sector continues to grow rapidly. The nearly $30 billion in monthly trading volume shows that prediction markets are gradually becoming a separate class of financial platforms.
For many traders, these markets are becoming an alternative to traditional news-based strategies. Instead of buying stocks or currencies, users trade directly on the probability of events.
This is especially noticeable against the backdrop of AI and algorithmic trading development. New platforms are already starting to build products where forecasting becomes part of an automated financial system.
What Comes Next?
The decline in Polymarket volumes may be the first sign that the prediction market is entering a phase of tougher competition. Now the sector faces several challenges at once: the fight for liquidity, regulatory pressure, and a technological race around AI tools.
The coming months will be especially important for Polymarket. The company needs to retain its global audience, develop its US direction, and respond to increased regulatory scrutiny all at once. The prediction market continues to grow for now. But leadership within it is no longer guaranteed.
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