A new U.S. survey has found that 79% of prediction-market users lost money during the past year, while 51% used borrowed funds to place bets.

Prediction market losses rise among borrowers

BadCredit.org surveyed 1,000 U.S. adults and found that 15% had used a platform such as Kalshi, Polymarket, or PredictIt, placing the consumer findings against a period of rapid trading growth and continued regulatory debate.

Among self-reported users, 79% said they had lost money on prediction markets in the past year. More than one-quarter, or 27%, reported losses above $500, including 9% who lost over $1,000. Only 21% said they had not lost money during the period.

Losses were more common among people who financed their positions with debt. According to the study, 51% of users had funded bets through a credit card, personal loan, or another form of borrowing. Of that group, 88% reported losing money, compared with 69% of users who did not borrow.

Consumer finance expert Erica Sandberg warned that debt adds repayment costs to an already uncertain outcome. Borrowers may owe interest after losing the original amount, increasing the total cost beyond the value placed on the contract.

“Although tempting, borrowing money to place a bet is a universally bad idea,” Sandberg said.

Credit cards and personal loans are meant to finance purchases that borrowers can repay, she added, rather than speculative contracts whose value depends on the result of a future event. Sandberg advised participants to use only cash they can afford to lose without affecting bills or creating debt.

The study measured whether respondents experienced losses during the previous year, but it did not publish platform-level account records or calculate net returns from verified transaction histories. Its results therefore represent participants’ own reports rather than audited trading data.

Income needs are drawing users to prediction markets

Financial motives ranked above entertainment when respondents explained why they began using prediction markets. The survey found that 44% wanted to earn extra income, while another 9% were struggling financially and needed an additional source of money.

Combined, 53% entered for an income-related reason. Entertainment or curiosity attracted 27%, social-media content influenced 10%, and recommendations from friends or relatives brought in 7%. Another 3% said conventional investing felt inaccessible.

Across all surveyed adults, 30% believed prediction markets could realistically improve their financial situation. Men expressed that belief more often than women, at 37% versus 25%.

Usage also showed a gender difference. According to the survey, 24% of men had tried a prediction-market platform, compared with 9% of women. BadCredit.org did not provide account-level data to determine whether bet sizes, contract choices, or returns differed by gender.

The income findings come as prediction markets offer contracts tied to elections, economic releases, cryptocurrency prices, sports, and other events. Participants generally buy contracts priced between $0 and $1, with the value moving according to the market’s estimated probability before settlement.

Separate transaction research has also found that profits can be concentrated among a small number of accounts. In April, crypto.news covered an academic study of 1.72 million Polymarket accounts and about $13.76 billion in volume from 2023 through 2025.

Researchers from London Business School and Yale classified 3.14% of the accounts as skilled winners. Skilled traders and market makers, who together represented less than 3.5% of accounts, captured more than 30% of gains, while 67% of accounts categorized as unlucky or unskilled losers absorbed the platform’s total losses.

Prediction market volume has reached record levels

Consumer losses have drawn attention during a sharp rise in platform activity. Kalshi, Polymarket, and Polymarket US generated a combined $50.59 billion in July trading volume, according to recent market data published on Aug. 3.

The monthly total increased 7.8% from a revised $46.95 billion in June. Kalshi accounted for $37.7 billion, or about 74.5% of the combined figure, while Polymarket US grew 54% to $5 billion.

Polymarket’s international venue recorded $7.9 billion, down 26% from June. Combined activity across its U.S. and international operations reached $12.9 billion.

The figures represent taker notional volume, not customer deposits, platform revenue, or trader losses. Because one contract can change hands several times before settlement, the same capital may contribute to volume repeatedly.

World Cup contracts supplied a large share of summer activity. Chainalysis estimated that about 400,000 wallets generated $5.7 billion during the five-week tournament and that World Cup markets accounted for roughly 63% of prediction-market activity over that period.

Open interest across Kalshi and the two Polymarket venues fell from around $2 billion near the start of July to about $1.2 billion by month-end as tournament positions closed or settled. The decline occurred even as monthly turnover reached a record.

US regulators are examining customer protection

Prediction markets in the United States sit between federal derivatives oversight and state gambling rules. Kalshi operates as a Commodity Futures Trading Commission-designated contract market, while QCX, which operates Polymarket US, also appears on the CFTC’s list of designated markets.

Federal registration has not ended disputes over sports contracts. Several states maintain that products tied to games resemble conventional wagers and require local gambling licenses, while the platforms argue that the Commodity Exchange Act places their event contracts under federal supervision.

In July, the U.S. House Agriculture Committee scheduled a hearing focused on customer protection and market integrity as gaming groups pressed Congress to restrict sports-based contracts. As reported at the time, representatives of the American Gaming Association and Indian Gaming Association argued that some prediction products perform the same economic function as sports bets.

CFTC officials have also told regulated platforms to avoid presenting contracts through American-style gambling odds, which use formats such as +150 or -200. The agency reminded operators that event contracts remain subject to derivatives laws and that marketing, listings, and solicitations cannot use deceptive practices.

State litigation continues alongside federal scrutiny. Courts in different jurisdictions have reached conflicting early decisions on whether commodities law prevents states from applying gambling rules, leaving access and product availability dependent partly on where a user lives.

BadCredit.org conducted its survey through an online panel and used raw, unweighted responses. Questions about borrowing, losses, and motivations went only to respondents who said they had used a prediction market. The organization calculated a margin of error of about ±3.1 percentage points for the full sample and approximately ±8 percentage points for findings drawn from the user subgroup.

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BitMart’s missing proof-of-reserves report and withdrawal complaints from two crypto projects have raised fresh questions about how customer assets are held during the exchange’s wind-down.

BitMart concerns expose verification problem

Arch Lending co-founder and CTO Himanshu Sahay said questions about withdrawals and exchange closures expose the difference between assurances offered by a platform and financial information that customers can independently check.

“Whenever questions arise around withdrawal processing or exchange wind-downs, it points to a structural gap across digital asset markets: the difference between platform-level statements and independent verification,” Sahay said in a statement to crypto.news.

Customers often have no real-time method for establishing whether an exchange holds their assets in segregated accounts or combines them with funds used for other operations, according to the executive. Uncertainty increases when withdrawals slow because customers must rely on the same company processing their requests for information about its financial condition.

Sahay said the crypto industry already has tools that can reduce such uncertainty, including third-party custodians, reserve attestations, and strict asset segregation. Their value depends on whether customers can use them to verify solvency claims before operational problems emerge.

“This isn’t a new issue, but a recurring one that resurfaces whenever a platform faces operational stress.”

BitMart stated in May that it was preparing a proof-of-reserves report after earlier complaints about account restrictions and withdrawal access. The exchange said it would release the report once security and risk-control matters had been addressed, but it did not provide a date.

No comprehensive report had been published as of Aug. 12. BitMart has also not released independently verified data covering both its assets and liabilities, leaving outside parties unable to establish whether the exchange holds enough liquid assets to meet all customer obligations.

Withdrawal complaints add pressure on BitMart

OpenGradient co-founder Matthew Wang alleged on Aug. 10 that his project’s market-making team could not withdraw balances held on BitMart. Wang accused the exchange of insolvency and questioned why it had encouraged token holders to lock assets shortly before announcing its closure.

“Our MM has our balances stuck on BitMart exchange that we can’t get out,” Wang said.

Wang did not disclose the amount or composition of the assets held by the market maker. His insolvency accusation has not been independently verified, and no confirmed evidence currently establishes that BitMart’s liabilities exceed its available assets.

Scandic Coin separately said that withdrawal requests covering approximately 21,898 USDT, 926,635 SNC, and another 256 USDT remained unprocessed after being submitted on July 26. The project stopped short of declaring BitMart insolvent and instead asked the exchange for verifiable evidence that it had enough liquidity to complete customer withdrawals.

The complaints were detailed in an Aug. 10 report on frozen withdrawals, which found that BitMart had not directly answered OpenGradient’s allegation at the time of publication.

BitMart maintains that withdrawals remain available. Under its procedures, requests may face checks involving customer identity, login devices, IP addresses, transaction history, destination wallets, and the source of funds.

Sanctions screening, Travel Rule requirements, and network conditions may also affect processing times, according to the company. BitMart warns that submitting a request does not mean the review has finished or that the transaction has been broadcast to a blockchain.

For customers, the absence of a transaction hash means there is no on-chain evidence showing that their assets have left the exchange. BitMart tells users to follow the status through their account history and avoid filing duplicate requests or support tickets.

Asset segregation must precede a crisis

Sahay said regulated third-party custody can reduce dependence on statements from an exchange because customer collateral remains separate from the company’s operating balance sheet.

“Maintaining collateral with qualified, regulated custodians completely separate from operating balance sheets is what ensures customers never have to rely on trust alone.”

According to Sahay, companies cannot obtain the full benefit of asset segregation by adopting it after withdrawals stall or concerns about liquidity have already surfaced. Custody arrangements need to be built into the platform’s structure from the beginning, with evidence showing where assets reside and how they are protected.

Proof of reserves can provide a snapshot of assets controlled by a platform, but such a report does not establish solvency by itself. A complete assessment also requires information about liabilities owed to customers, lenders, market makers, and other counterparties.

Reserve reports can present other limitations because they usually cover a specific point in time and may exclude certain assets or obligations. Customers also need a way to confirm that their individual balances were included in the review, while auditors must establish that the company controls the disclosed wallets.

Comparable concerns have surfaced at other centralized exchanges. In June, on-chain investigator ZachXBT said AscendEX users had reported withdrawals pending for days or weeks and questioned whether publicly identified hot wallets contained enough large-cap assets.

The resulting AscendEX liquidity concerns could not be confirmed from labeled addresses alone because an exchange may hold funds in undisclosed cold wallets or with external custodians. The episode still showed how limited wallet visibility can prevent customers from evaluating an exchange during withdrawal pressure.

Sahay expects independently verifiable third-party custody to become a basic requirement as institutional and retail participation develops. Platforms that can show where customer assets are held and how they are separated from operating funds will be able to answer such questions with evidence rather than internal assurances, he said.

BitMart will end trading on Aug. 26

BitMart began winding down its global trading platform on July 26, citing its operating conditions, the market environment, and its future strategy. The exchange stopped accepting new registrations and began suspending cryptocurrency and fiat deposits from 01:30 UTC.

Spot markets stopped taking new orders, while futures accounts entered reduce-only mode. BitMart also began discontinuing copy trading, grid trading, API trading, and other automated services.

BMX, the exchange’s platform token, fell approximately 63% during the first 24 hours following the announcement, according to the earlier BitMart shutdown report. CoinGecko data cited at the time placed BMX near $0.164 with around $6.1 million in daily trading volume.

All spot, futures, and other trading services are scheduled to end at 01:00 UTC on Aug. 26. BitMart may settle any futures positions left open at the cutoff using the relevant mark price, index price, or settlement rules.

Customers have been asked to close trading positions, cancel pending orders, and redeem eligible balances held in Earn, staking, lending, and other products. The company recommends submitting withdrawal requests before 05:00 UTC on Aug. 26.

Requests submitted after that time will enter a separate processing procedure. BitMart said affected customers would receive instructions about additional documents and withdrawal steps through official announcements or direct account notifications.

Founder Sheldon Xia denied on Aug. 8 that BitMart had disappeared, planned to avoid its obligations, or misappropriated customer assets. Xia said the core team was conducting an asset inventory, consolidating funds, and maintaining the systems required for the closure.

The founder also said BitMart was considering court involvement and third-party auditors as part of a transparent review. He did not provide a publication date or explain whether the proposed report would cover customer liabilities alongside reserve assets.

BitMart plans to cease trading-platform operations at 15:59 UTC on Jan. 31, 2027. The exchange said customers would retain account access for a specified period afterward to review historical records and submit withdrawals under the procedures then in effect.

For U.S. residents, BitMart stopped accepting new registrations in May 2022, although the company said some older accounts could remain linked to American users. A July 23 notice instructed affected customers to close positions, cancel orders, redeem balances from earning products, and withdraw their assets by 23:59 UTC on Aug. 8.

BitMart said U.S.-linked accounts could face additional restrictions after the deadline, while pending withdrawals may require identity records, proof of address, source-of-funds documents, or evidence that the customer controls the receiving wallet.

Bitcoin traded softer around the Wall Street open on Wednesday as traders digested fresh US inflation data and reassessed how restrictive the Federal Reserve is likely to remain. Despite July CPI coming in line with expectations, BTC/USD slipped below $63,500, erasing earlier gains and bringing renewed attention to the $63,000 area.

Market focus is now shifting to Thursday’s Producer Price Index (PPI), with investors looking for clues on whether inflation momentum is truly cooling or merely pausing—especially after recent labor-market signals have already complicated the rate path debate.

Key takeaways

• BTC/USD slid back below $63,500 after July CPI matched expectations, showing inflation “in line” did not automatically translate into bullish momentum.
• CME Group’s FedWatch Tool indicates a higher probability that the Fed holds rates at the current 3.50%–3.75% range for September compared with a month ago.
• Traders are warning that the $63,000 support zone may be weakening as bounces lose strength, increasing the risk of a cleaner breakdown.
• Options pricing suggests traders are still paying for downside protection, and PPI is set to be the next catalyst for that view.
• Overhead resistance around $65,000–$65,500 remains a recurring barrier, with recent price action failing to produce sustained daily closes above it.

Inflation matched expectations—yet Bitcoin weakened

TradingView data showed BTC/USD moving down below $63,500 after initially holding gains. The broader market reaction was relatively muted in equities, because the July CPI report landed essentially where economists expected.

According to a Bureau of Labor Statistics (BLS) release, CPI increased 0.1% month-on-month and 3.4% year-on-year. The report also highlighted that the “shelter” component rose 0.1% in July and represented about two-thirds of the month’s all-items increase. Food prices edged up 0.1% overall, while the energy index declined 1.5% for the month.

While CPI did not repeat June’s downside surprise, the lack of a supportive reaction matters to crypto traders because it suggests the market is no longer searching for “good news” so much as it is looking for confirmation that the Fed is done tightening—or at least done tightening soon. In other words, a headline number that is merely “in line” may not be enough to shift risk appetite if traders remain focused on policy risk.

Rate expectations cooled, but traders are waiting for the next data point

Fabian Dori, CIO at Sygnum Bank, argued in emailed comments that CPI’s cooling effect—combined with weaker labor-market figures—could strengthen the case for the Fed to avoid additional rate hikes. He suggested this would be supportive for liquidity conditions that tend to benefit crypto and other risk assets.

Dori framed the near-term takeaway as a gradual cooling narrative without forcing markets into a recession scare or an abrupt “hawkish re-pricing.” He also pointed out that September rate odds should stay relatively stable if the macro mix does not deteriorate.

Consistent with that view, CME Group’s FedWatch Tool showed about 60% odds that the Fed would hold rates at its current 3.50%–3.75% range at the September meeting—up from 30% a month earlier. Investors typically watch this kind of shifting probability because it influences discount rates and risk appetite across assets, including crypto.

Still, traders are not fully comfortable treating CPI as a decisive turning point. Andrei Grachev, managing partner at DWF Labs, told Cointelegraph that an in-line CPI print doesn’t “resolve much” after the previous jobs report missed expectations. He also emphasized the state of the derivatives market: he said the Bitcoin options market was continuing to price a meaningful premium for downside protection into the end-August expiry.

Grachev added that Thursday’s PPI report would be the next check on whether that premium begins to fade—an important signal for whether traders see risk as moving toward normalization or remaining skewed to the downside.

Support at $63,000 under pressure as bounces weaken

Beyond macro, technical traders are focused on how price is behaving around the same key levels. Rekt Capital warned on X that each bounce from approximately $63,000 has been losing momentum, with the strength of the support appearing to progressively fade.

His commentary included a sequence indicating that the “support” effects on rebounds had diminished over time—culminating in what he described as support that had thinned to roughly 1.15% “thus far.” He cautioned that once rebounds become too weak, the market may stop defending the floor.

“At some point the bounces will become so weak that the floor will simply break.”

Rekt Capital also referenced earlier analysis that Bitcoin bear-market history may be repeating as the 50-month exponential moving average (EMA), currently around $65,827, acts as resistance rather than support.

That resistance picture is echoed by Bitfinex Alpha, the research arm of exchange Bitfinex. In an update published Wednesday, it said equities set all-time highs over the prior two weeks while Bitcoin continued to struggle with a consistent barrier in the $65,000–$65,500 zone. The research noted that from early August through that period, the market printed daily highs above $65,000 multiple times, but failed to record a daily close above that level since late July.

What to watch next: PPI and whether protection costs ease

With CPI already “in line,” the market’s next move is likely to depend less on whether inflation prints look merely acceptable and more on whether they confirm a sustained trend—something PPI could clarify. For traders, the key questions are whether Bitcoin can stabilize above $63,000 or whether weakening bounces turn into a more decisive break, and whether options pricing starts to show reduced demand for downside protection as expectations evolve.