Prediction Markets vs. Meme Coins: Where Will Crypto's Next Growth Come From?

Prediction markets are rapidly gaining traction in the cryptocurrency space while meme coins seem to be losing momentum. This evolving landscape is prompting discussions about where speculative investments might head in 2026.

Key Takeaways

Meme Coins Saw a Surge: In 2023, meme coins experienced a remarkable boom, reaching a market cap of nearly $22 billion.
Shift in Trading: As of late 2025, trading volumes for meme coins have plummeted, down approximately 85% from their peak.
Prediction Markets on the Rise: Concurrently, platforms like Kalshi and Polymarket have seen substantial growth, with Kalshi hitting $1 billion in weekly trading volume focused mainly on sports and political contracts.
Different Strategies: Prediction markets offer a structured approach that contrasts sharply with meme coins, attracting a stable user base.
Future Coexistence: Rather than one replacing the other, both prediction markets and meme coins are expected to coexist, catering to different investor needs.

The conversation gained pace when John Wang, head of crypto at Kalshi, referred to prediction markets as "the meme coins of 2023." He noted that both phenomena draw interest from traders searching for unique investment opportunities.

This remark comes as meme coin activities have significantly decreased after a volatile couple of years.

The Rise and Fall of Meme Coins

In 2023, meme coins experienced explosive growth, fueled by new token launches and extensive social media exposure. By the end of that year, the total market capitalization for this sector reached nearly $22 billion, alongside a significant increase in trading activities.

Meme Coins Surge

Trading data indicated an over ninefold increase in average volumes during the first eleven months. The market experienced two major rallies, particularly an April–May surge driven by speculative new launches.

This speculative fervor continued into 2024, where meme coins achieved an estimated peak market cap of about $150 billion in December, spurred on by tokens like Dogecoin, Shiba Inu, Pepe, and an array of political-themed coins.

However, the market's sharp decline in late 2025 saw the total value of meme coins sink below $42 billion, with daily trading volumes diminishing and many tokens losing a significant portion of their previous gains.

Meme Coin Decline

Recent data has shown that trading volumes for meme coins are down roughly 85% from their highs, indicative of a broader decline in risk appetite among traders.

Prediction Markets Gaining Traction

As meme coins slow down, prediction markets are thriving. Platforms such as Kalshi, Polymarket, and Limitless collectively reported $44 billion in trading volume this year, with Kalshi achieving $1 billion in weekly volume primarily through sports and political contracts.

Prediction Markets Volume

On-chain prediction markets have experienced even faster growth, with monthly volumes skyrocketing from under $100 million in early 2024 to more than $13 billion today—a 130-fold increase. Most of this growth in 2025 stemmed from non-sports markets, including events tied to economics, politics, and technology.

The operational structure of prediction markets differentiates them from meme coins, as traders can buy shares indicating “yes” or “no” outcomes on specific events. The prices of these shares reflect implied probabilities and settle via oracles once the events occur. Proponents argue that this framework allows for more transparent pricing and reduces some risks of manipulation associated with lower liquidity markets.

However, critics point out that the capped returns in prediction markets may prevent smaller traders from making significant gains compared to the potential rewards from early-stage meme coin trading.

A Balanced Future: Prediction Markets vs. Meme Coins

Describing the trend as "prediction markets killing meme coins" oversimplifies the situation. Meme coins are not gone; their liquidity has merely decreased, impacting many other areas of the crypto sector as well.

History suggests that markets driven by memes tend to lie dormant rather than vanish entirely. When volatility returns and risk appetite grows, meme coins can rebound swiftly.

Conversely, prediction markets appear to be carving out a loyal user base. Their upswing isn't merely a response to cyclical market trends; it is supported by real-world events, clearer regulations in certain areas, and a genuine demand for structured speculation. This resilience is often absent in meme coins during downturns.

The likely outcome is a scenario where both prediction markets and meme coins coexist, catering to diverse trader preferences. Meme coins will thrive during speculative peaks and attention-driven cycles, while prediction markets will draw those seeking reliability, probability-driven pricing, and event-specific opportunities. This shift reflects a more mature cryptocurrency market where capital reallocates rather than disappears, manifesting as diverse forms of speculation instead of clustering around a single trend.