Prediction Platforms Face Post World Cup Slowdown

The World Cup final delivered its verdict on the field. On prediction markets, it marked the end of a speculative frenzy worth several billion dollars. After Spain’s victory over Argentina (1-0), the combined open interest of Kalshi and Polymarket fell by nearly 20% from its peak of about 2 billion dollars reached in early July. This sharp decline reveals the dependence of prediction platforms on major media events and reignites the debate about their ability to maintain user engagement outside global events.

The sharp collapse of transactional volumes on Kalshi and Polymarket

The end of the football World Cup caused a spectacular drop in transactional activity on the two main prediction platforms, namely Kalshi and Polymarket, where sports betting accounted for about 80% of total volumes during the tournament. Thus, published data highlight the weekly sports-related figures :

• Kalshi : weekly volumes peaked at about 9 billion dollars during the week of July 5, before collapsing nearly 55% to about 4 billion dollars by July 19 ;
• Polymarket : weekly volumes plummeted nearly 70% over the same period, dropping from a peak near 2.3 billion dollars to only 740 million dollars.

This contraction is explained by the internal mechanics of the sporting competition and the gradual reduction of negotiable contract offerings. The group stage, which gathered 48 teams between mid-June and the end of that month, offered a daily match density that fueled a continuous rotation of capital. As the schedule tightened during the knockout phases, the number of daily matches decreased, causing the gradual drying up of markets available for bettors until the World Cup final took place.

The empirical assessment of portfolios related to the World Cup

The balance sheet analysis of participants in World Cup-related bets reveals a marked asymmetry in the distribution of profits and losses on these decentralized markets. The compiled data indicate that 194,000 unique addresses traded on the market dedicated to the World Cup winner, and about two-thirds of them suffered financial losses. The vast majority of balance variations remained below the $100 threshold, although extreme gaps were observed between the usual user base and a minority of very large players.

In detail, only 54 addresses generated more than $100,000 in net profits on this particular contract, among which five addresses surpassed the million-dollar gains mark. On the opposite end, 43 addresses recorded individual losses exceeding $100,000 at the conclusion of the competition. These statistics show that despite the apparent democratization of Web3 speculative tools among the general public, most of the net capital generated remains concentrated in the hands of an extremely limited number of operators.

The resilience of open interest and the lag in market mechanics

From a purely structural point of view, the decline in overall open interest proved much more moderate than the direct collapse of gross exchange volumes. On a smoothed weekly basis, combined open interest rose from $1.2 billion at the end of May to nearly $1.8 billion for the week ending July 5, before falling back to around $1.5 billion in the week closed July 19. This difference between the two on-chain indicators is explained by the technical nature of the metrics. Daily volume measures the immediate rotation of capital traded on recent matches, whereas open interest retains locked funds.

Such a lag comes from the fact that capital immobilized in open interest is only released at the official settlement of underlying markets. As long as events are not formally closed by validators, positions remain recorded on the platforms’ balance sheets. Thus, while trading activity stops instantly with the final whistle, financial disengagement occurs with natural inertia, spreading the contraction of engaged capital over a longer period than the sharp drop in daily liquidity.

Following the biggest global sporting event, overall activity on prediction markets should enter a phase of relative lethargy in the absence of an immediate catalyst of similar magnitude to sustain user engagement. Liquidity retention will be the main challenge for these platforms until the next major attention cycle emerges, expected with the US midterm election campaign in the fall. While these protocols have proven their ability to capture attention during major events, their long-term valuation will depend on their capacity to sustainably diversify their transactional themes beyond purely seasonal phenomena.