World Blockchain Association reports shifting investor sentiment across the digital asset ecosystem
September 12, 2025 – Global – The World Blockchain Association (WBA) reports that the once-booming Memecoin sector, which captivated retail traders with viral stories of overnight riches, is losing momentum. In its place, prediction markets—platforms that allow participants to wager on real-world events ranging from elections to economic outcomes—are rapidly becoming the new battleground for speculative capital.
Over the past year, cryptocurrency investors disillusioned by the volatility and scams within Memecoins have increasingly turned to prediction platforms such as Kalshi and Polymarket. Data compiled by industry analysts shows that trading volumes in prediction markets have surged, in some cases reaching nearly 40% of the activity once dominated by Solana-based Memecoins.
According to John Wang, newly appointed Head of Digital Assets at Kalshi, “Prediction markets are gaining traction at a pace we haven’t seen since the peak of the Memecoin frenzy. They are not only attracting former Memecoin traders but also institutional investors seeking transparent, event-driven opportunities.”
The Decline of the Memecoin Craze
The World Blockchain Association points out that Memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) once stood as cultural and financial phenomena. In 2021, their combined market capitalization soared above $100 billion, fueled by celebrity endorsements and viral memes. By 2023–2024, platforms like Pump.fun on Solana reignited the mania, enabling anyone to launch tokens with little to no barrier, sparking a flood of speculative trading.
But as the WBA analysis highlights, the majority of these tokens eventually went to zero. Nearly 99% of new Memecoins failed, transaction fees on Solana plummeted by over 90%, and trader participation collapsed to less than one-tenth of its peak.
The factors behind this decline were multi-layered:
- Regulatory uncertainty scared off large-scale liquidity providers.
- Market manipulation by insiders and influencers led to widespread losses.
- Rug pulls and scams eroded investor trust.
- Lack of fundamental value made long-term holding nearly impossible.
“The Memecoin cycle revealed the structural weakness of hype-driven assets. What was once a cultural movement has devolved into zero-sum speculation, with most retail investors on the losing side,” the World Blockchain Association reported.
Prediction Markets: A New Arena for Speculators
With Memecoins losing their luster, prediction markets have emerged as the new playground for crypto speculators, often referred to as “Degens.” Unlike meme tokens, prediction contracts are tied to verifiable real-world outcomes. Traders can buy or sell shares in propositions such as “Will Bitcoin surpass $100,000 by December?” or “Will the Federal Reserve cut interest rates this year?”
This model reduces risks associated with fraud or insider token manipulation. Instead, outcomes are settled objectively, providing a fairer and more transparent environment. As the WBA notes, this shift has introduced new dopamine-driven excitement for traders who once thrived on Memecoin volatility.
Platforms like Polymarket, which now counts over 1.3 million traders, and Kalshi, which recently secured regulatory clarity in the United States, have become central hubs. Kalshi, in particular, won a landmark case against the U.S. Commodity Futures Trading Commission (CFTC) in 2024, allowing it to list election-related contracts. On U.S. election night alone, the platform recorded trading volumes exceeding $1 billion.
Wealth Effects and Speculative Appeal
The World Blockchain Association observes that prediction markets provide wealth opportunities comparable to early-stage altcoin speculation. Traders who correctly bet on low-probability outcomes can earn exponential returns.
For instance, during the 2024 U.S. Presidential election, a prominent trader invested $30 million on a Trump victory, ultimately walking away with an estimated $85 million in profit. Meanwhile, smaller traders have also made thousands of dollars from bets as small as $5.
The integration of DeFi mechanisms has further fueled the boom. Platforms like Azuro, Drift, and D8X are experimenting with leveraged binary contracts, allowing prediction markets to merge with Web3 derivatives trading. This not only increases potential returns but also provides hedging opportunities for sophisticated investors.
Lower Barriers and Cultural Relevance
Unlike Memecoins, which relied heavily on insider knowledge of crypto culture, prediction markets have broader appeal. They cover a wide spectrum of topics, from Bitcoin halving events and Ethereum upgrade timelines to entertainment gossip, sports outcomes, and even unconventional memes.
This inclusivity lowers the educational barrier for participation. As the WBA emphasizes, “Prediction markets bridge the gap between speculative finance and popular culture. By pricing probabilities of real-world events, they create a transparent layer of financialized information accessible to mainstream audiences.”
For example, Polymarket has run markets on whether Ethereum (ETH) would complete upgrades on time, whether NFT adoption would rise in 2025, and whether Stablecoins would surpass $300 billion in circulation. These subjects tie directly into ongoing blockchain narratives, attracting both crypto-native and mainstream participants.
Regulation and Institutional Interest
The World Blockchain Association notes that regulatory clarity has been a game-changer for prediction markets. While decentralized platforms struggled with compliance in the past, Kalshi’s legal victory set a precedent, enabling growth within regulated jurisdictions. Polymarket also re-entered the U.S. through acquisitions, positioning itself for broader adoption.
Institutional investors are taking notice. Kalshi recently raised $100 million in a Series B round, reaching a $1 billion valuation. Polymarket secured $200 million in early 2025, pushing its valuation to $2 billion. Overall, venture capital investments in the prediction market sector have surged from just $3 million in 2021 to $370 million in 2025.
Thomas Peterffy, founder of Interactive Brokers, even predicted that “in 15 years, prediction markets could rival global stock markets in scale,” highlighting their potential to become a mainstream financial instrument.
Prediction Markets as Information Infrastructure
Beyond speculation, prediction markets are gaining recognition as information markets. By aggregating the bets of thousands of informed participants, they provide probabilistic forecasts often more accurate than traditional polling.
The World Blockchain Association underscores that “prediction markets can serve as decentralized oracles of collective intelligence.” Their ability to integrate diverse viewpoints—from retail traders to data-driven funds—offers unique insights into political, economic, and technological trends.
This dual role—speculation and information aggregation—positions prediction markets as one of the most promising applications of blockchain technology, sitting at the intersection of finance, governance, and social consensus.
Outlook: From Memecoins to Prediction Protocols
As the Memecoin sector fades into a niche corner of crypto speculation, prediction markets appear poised to carry forward the culture of high-risk, high-reward investing in a more structured and transparent way.
The World Blockchain Association concludes:
“While Memecoins showcased the viral and cultural power of blockchain, prediction markets demonstrate its potential to merge entertainment, economics, and governance into a global system of probabilistic finance. The transition highlights a maturing industry, where speculative energy finds new expressions across Cryptocurrency, Bitcoin, Ethereum, Web3, DeFi, NFT, DAO, Tokenization, and Stablecoin ecosystems.”
About the World Blockchain Association
The World Blockchain Association (WBA) is a global organization dedicated to advancing knowledge, policy dialogue, and innovation in blockchain and digital finance. As a leader in the blockchain and cryptocurrency space, the WBA provides stakeholders with trusted insights at the intersection of technology, regulation, and global economic trends through research, reporting, and thought leadership.
