How Crypto.com Is Shaking Up the Predictions Markets

Ok, so you have probably heard about Kalshi and Polymarket. Let's be honest, it is hardly possible to read, watch, or listen to the news without their names popping up. You might not be completely clued up on what they actually are, but it seems everyone has an opinion about them. Equally, anyone who has an opinion on anything, be that the outcome of a sports or political event, or any real-world event with a binary outcome, can now seemingly back their hunch with a financial trade on the prediction markets.

This has changed the American gambling market. Even though these apps and platforms are not officially gambling, they allow people to act in a way that gives a similar result in terms of placing money on the outcome of a future event. While gambling is regulated at the state level, prediction markets are overseen at the federal level. Rather than being classified as gambling platforms, they are regulated as financial derivatives by the CFTC (Commodity Futures Trading Commission).

Allowing millions to back a hunch with real money trades

As you can imagine, while millions of traders are delighted with the opportunities now available, particularly in populous states like California and Texas, where online sports and casino gambling for real money are not allowed. Unsurprisingly, not everyone is happy – particularly state Governors and lawmakers. In ultra-conservative states like Utah, the Governor has vowed to do everything in his power to prevent prediction markets from operating on moral and religious grounds. In progressive states like New Jersey and Pennsylvania, the objections are based on the fact that federal platforms will drain revenue from state-regulated betting sites – that revenue that is derived from gambling is essential to their economies.

However, you look at it, these 'new-kids-on-the-block' are causing a stir and creating incredible profits for their operators. Unlike traditional sportsbooks, they do not make money through house edge or setting odds; the market and trading determine potential payouts.  They make their money through fees and spreads.  The US market is potentially massive for online gambling platforms, but the state-by-state regulatory system makes it fragmented, and companies can struggle to gain the economies-of-scale advantage. Prediction market apps and platforms do not have the same concerns.

Two big names are not the only story

While there were two big names, the market is changing rapidly, and more operators are entering the space to take on the likes of Kalshi and Polymarket. One of the recent entrants is Crypto.com's Crypto.com Predict and they are taking the fight right to its competitors. While all the platforms are hoping to attract users, Crypto.com Predict is offering some of the most attractive sign-up bonuses around. In fact, online gambling review site Casino.org offers a Crypto.com sign-up bonus of up to $50 for new users. That is five times more generous than some of the other sites and comes with very few strings attached.

Like other prediction markets, Crypto.com Predicts is built around event contracts – simple YES or NO positions on real-world events. Traders buy into the side they believe will be correct at a price of between $0 and $1. All trades are two-sided; if someone is buying a YES, another else is buying a NO. The price reflects the market's implied probability. Unlike sportsbook betting, this is not set by an expert third party but relies on the market itself to set the price. When the event's outcome is known, the contract settles at $1 if the predicted outcome occurs and $0 if it does not. The gross profit or loss is derived from the difference between the price paid and the final settlement figure. However, traders also need to be aware that there will be fees that can eat into profits and increase losses!

The same but different

Unlike the larger, flashier platforms, Crypto.com Predict is part of the already established platform, rather than a standalone one. The service is offered as a federally regulated derivatives product under the CFTC framework, not as a state-licensed sportsbook. This is how it can operate across the USA. However, there is still a considerable degree of legal wrangling and argument going on, which means that product restrictions can affect what users in different states can access. Sports contracts are a particular bone of contention in many states, and there is quite a fight over them.

Regardless of what state regulators want, Crypto.com Predict is available in most US states plus Washington, DC, but it is not universally accessible. Casino.org reported that the welcome bonus was not available in AZ, AR, CT, IL, LA, MD, MA, MI, NV, NJ, NY, and OH, but access is subject to change. Sports-related event contracts are most likely to be restricted, while other events, including cultural, political, and economic ones, are available.

Funding of trades

For crypto users, there is the slight irony that while Crypto.com Predicts is a service offered by a crypto platform, the bonus is offered in USD. However, that does not mean that users cannot use cryptocurrency to trade on the platform – they just need to exchange it. The platform allows traders to fund their accounts with crypto, which is then converted to USD via "Crypto Funding" to place trades. Over 350 tokens are supported, including BTC, ETH, and CRO. However, it is not a crypto-exclusive service, so it is universally attractive, as accounts can also be funded with fiat currency, eWallets, bank transfers, bank cards, or services like PayPal.

It is important to note that while traders can deposit crypto into the app, they will incur network fees to send it. Withdrawals might also carry network fees that vary by chain and are shown before you confirm. The advice with all prediction market trading is to make sure fees and any other costs are understood in advance. Taking a little time to read the small print can make all the difference down the line.

Liquidity Matters

Crypto.Com Predicts can leverage its existing exchange to create deep, reliable liquidity. One of the barriers to growth in this space has been liquidity, and the Web3 platforms often suffer from high slippage and thin books. Crypto.com, on the other hand, is using the model of an existing major exchange and importing it into the prediction markets—a subtle difference, but one that ensures stability.

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