Cryptocurrency traders massively withdraw from the prediction market! Polymarket trading activity plummets by 55%

X Product Lead Nikita Bier announced the upcoming launch of the “Getting Started Pack” feature within weeks, preloading over 1,000 categories covering Bitcoin, cryptocurrencies, and enabling new users to follow top KOLs with one click. Responding to the platform’s Bitcoin post volume crisis in 2025, which dropped 32%, drawing lessons from Bluesky and Threads’ successful experiences.

Polymarket Crypto Market Maker Activity Plummets 55%

(Source: Dune)

Cryptocurrency traders remain active in prediction markets, but the number willing to take risks has decreased. BeInCrypto’s latest on-chain analysis shows that high-win-rate crypto trading on the Polymarket platform peaked twice—at the end of December and the first week of the new year—after which activity has continued to cool since early January. These data do not track ordinary users or passive viewers but focus on wallets actively placing orders and providing liquidity in crypto-related markets, offering a clearer picture of trader sentiment.

BeInCrypto analysts examined daily market maker activity on Polymarket over the past 30 days, filtering only prediction markets tagged with cryptocurrencies, such as Bitcoin and Ethereum price outcomes, Meme coins, NFTs, and Airdrops. Since this dataset only counts market makers, it captures risk-taking wallets actively providing liquidity rather than traders merely executing existing orders. The results reveal two distinct waves of participation.

The first peak occurred in late December, when daily active trading volume surged to over 30,000. The second, even stronger peak appeared in early January, with active wallets reaching 40,000 to 45,000. However, after January 9, the trend reversed. Daily active market maker volume in crypto markets steadily declined in mid-January, falling to around 20,000, and sharply dropped at the end of January. This indicates that activity among crypto market makers in prediction markets plummeted by about 55% in less than three weeks, reflecting a sharp shift in risk appetite.

Changes in Polymarket Crypto Market Maker Activity

Late December Peak: Over 30,000 active wallets daily

Early January Peak: 40,000 to 45,000 active wallets daily

Mid to Late January: Sharp decline to around 20,000

Drop: Approximately 55% from peak levels

The decline in market maker activity is a more warning-significant indicator than overall user numbers. Market makers are core participants in prediction markets—they provide liquidity, assume risk, and facilitate price discovery. When they withdraw, market depth and efficiency decline, often foreshadowing larger-scale user exits.

Bitcoin Betting Cools Simultaneously, Reflecting Overall Sentiment

(Source: Dune)

Prediction markets centered on Bitcoin follow the same pattern. Another Dune chart tracks Bitcoin-only Maker wallets, showing high user activity in late December and early January, followed by a continuous decline. As of January 18, the number of active Bitcoin creators dropped to 2,875 wallets, a significant decrease from previous five-figure levels.

This confirms that the slowdown is not limited to small altcoins or meme tokens. Bitcoin—the most liquid and stable crypto category on the platform—also experienced a retracement. This cross-asset synchronized decline indicates that the issue is not waning appeal of specific tokens but a cooling of overall crypto prediction market risk appetite.

The decline in Bitcoin betting activity is particularly noteworthy because Bitcoin is often seen as a market indicator. When even Bitcoin prediction market participation drops, it signals traders lack confidence in the short-term outlook of the entire crypto space. This sentiment may be linked to Bitcoin’s volatile price swings in January, which saw it fall from near $100,000 to $87,000, causing significant losses for many traders and prompting them to temporarily exit risk markets.

The sharp contraction of Bitcoin market maker wallets from five figures to 2,875 represents a roughly 71% decrease. Such a withdrawal is rare in prediction market history, indicating that traders are not just waiting on the sidelines but actively exiting participation.

Stable Total User Count but Divergence with Market Maker Withdrawals

(Source: Dune)

Weekly data from various prediction market platforms provide additional context. Polymarket continues to dominate weekly prediction market user share, with total user numbers far exceeding smaller competitors. During the late December and early January peaks, weekly total users across platforms reached over 200,000 to 300,000.

Despite the overall high user count, active user composition has shifted. While overall participation remains relatively high, the proportion of market makers involved in crypto markets has decreased. This divergence suggests traders have not completely exited prediction markets but are becoming more cautious about when and how much they commit.

This phenomenon reveals subtle shifts in prediction market user behavior. Maintaining stable total user numbers indicates continued interest and monitoring of various events’ odds. However, a significant drop in market maker numbers shows fewer traders are actively placing bets and taking risks. This transition from “active participation” to “passive observation” reflects a broader risk appetite cooling in the crypto market.

Liquidity providers tend to withdraw before overall user numbers decline. When market volatility decreases or trends lose momentum, traders often stop posting new orders but continue to monitor markets or trade opportunistically. The data clearly shows this trend. Crypto market maker activity has continued to decline after early January, indicating waning market confidence rather than a sudden loss of interest.

This behavior is similar to dynamics in DeFi and derivatives markets, where funding rates, open interest, and liquidity depth tend to weaken before spot trading volume drops. The withdrawal of prediction market market makers may serve as a leading indicator of broader crypto market adjustments, warranting close investor attention.

Risk Aversion Signals Not Platform Decline

Traders are still using prediction markets, but the number willing to take risks has decreased, indicating a cooling of risk appetite rather than mass user exit. Combining all data, a clear conclusion emerges: crypto traders have not abandoned prediction markets. However, compared to early January, fewer traders are providing liquidity and taking directional risks.

In short, prediction markets are signaling a shift toward risk aversion in the crypto market, first evident among the most confident traders. This leading indicator may foreshadow larger corrections in spot and derivatives markets. When the most active and experienced traders withdraw, it often suggests they see risks that ordinary investors have yet to perceive.

Bitcoin-related bets follow the same pattern, indicating that the slowdown reflects broader crypto sentiment rather than declining interest in smaller tokens or niche markets. This cross-asset cooling makes prediction markets an important window into the overall health of the crypto market.