The market is predicted to exceed $20 billion/month, with geopolitics leading the way: TRM Labs

Prediction markets for future events first surpassed the 20 billion USD monthly trading volume mark, amid a surge in activity driven by geopolitical factors and U.S. politics.

According to a report from blockchain analytics firm TRM Labs, total monthly trading volume across prediction market platforms has risen sharply from 1.2 billion USD at the start of 2025 to more than 20 billion USD, while the number of unique wallets increased by more than three times, reaching 840,000 in the six months through February 2026.

The report shows that geopolitical events, macroeconomic developments, and U.S. politics currently account for the majority of trading activity, surpassing the “crypto-native” markets that previously dominated.

Based on user behavior, TRM Labs identified four main characteristics in Polymarket’s market structure. In the high-volume segment, geopolitical topics are dominant, but the flow of funds is dispersed into many overlapping questions related to leadership, conflict scenarios, and policy, rather than concentrating on a single scenario. U.S. politics remains the second pillar, with contracts related to domestic events frequently landing among the highest-volume groups.

Crypto price prediction markets make up only a small share at every level of users. Meanwhile, sports and entertainment betting peaks among mid-level traders and experienced market makers, rather than newcomers.

The report also emphasizes that Polymarket’s design does not distinguish between “serious” or “entertainment” markets, nor does it categorize contracts by financial instrument. Instead, the platform operates like a “super app,” where users can trade political, cultural, and crypto outcomes on the same interface.

According to the data, the 10 highest-profit wallets on Polymarket in early 2026 reflect three main strategies: betting based on macro conviction, algorithmic market making, and taking advantage of event-driven opportunities.

The top wallet recorded 6.2 million USD in profits across multiple markets, including decisions by the U.S. Federal Reserve (Fed), the World Cup, and the 2028 election. Six of the ten wallets trade every day throughout the 80 days from 1/1 to 22/3.

Concerns about insider trading

TRM Labs analysts said they observed behaviors consistent with market manipulation as understood in traditional finance. These include multiple wallets coordinating to open positions ahead of major news, accounts that only deposit funds once to place a high-confidence bet and then withdraw immediately after the market ends, as well as low-liquidity markets where a single player can influence prices.

An example cited in the report is that four wallets turned roughly 40,000 USD into 872,000 USD by betting on the likelihood that the U.S. would take military action against Iran in January and February 2026. All four participated while the contract price ranged from 0.10–0.80 USD and settled at 1 USD once the event was confirmed.

The report also found that these wallets use shared infrastructure: they deposit funds through a single bridge within a short period, drain their balances after profiting, and do not return to the market.

In light of these concerns, on 23/03/2026, Kalshi and Polymarket announced new measures to curb abnormal behavior, including tightening the group that has access to undisclosed information and strengthening mechanisms to ensure market integrity.