Prediction markets are seeing steady growth in the U.S., but a wave of legal disputes and shifting competition is beginning to reshape the sector, a new report from Bank of America said.

Total weekly volume rose 4% week-over-week, according to the report, with Kalshi — a federally regulated exchange — leading gains at 6%. Crypto.com posted a smaller increase, while Polymarket, a crypto-native platform that had surged in prior weeks, saw overall volumes fall 16%.

Kalshi now controls roughly 89% of measured U.S. prediction market volume, far ahead of Polymarket at 7% and Crypto.com at 4%, according to BofA estimates. The shift points to a market consolidating around platforms with clearer regulatory standing.

That divide reflects a deeper tension. At the center is whether prediction markets should be treated as financial instruments or as gambling. Kalshi operates under oversight from the Commodity Futures Trading Commission (CFTC), framing its contracts — including those tied to political or sports outcomes — as derivatives.

Polymarket runs on blockchain rails and has historically operated outside U.S. regulatory boundaries. It allows users to trade on event outcomes using crypto, often attracting global liquidity but facing restrictions domestically.

The gap is becoming more visible as regulators step in. Nevada and Massachusetts have both secured preliminary injunctions against Kalshi at the state level, while New Jersey lost an appeal that limits its ability to enforce gambling laws against the firm.

At the same time, the CFTC has taken an aggressive stance in support of prediction markets.

The agency has sued multiple states, arguing that federal law preempts state-level gambling rules. CFTC leadership has also drawn a distinction between sports betting, which it views as entertainment, and event contracts, which it classifies as financial tools for hedging risk.

The outcome of that fight could define the industry. A federal win would allow platforms like Kalshi to scale nationally under a single framework. A loss could push the market into a state-by-state model similar to online sports betting, slowing growth.

Crypto firms are still trying to carve out a role. Polymarket remains one of the largest global platforms and has drawn attention during major events like elections, where trading volumes can spike sharply. Meanwhile, companies like Crypto.com and Coinbase (COIN) are experimenting with prediction market-style products, signaling broader interest from centralized exchanges. The largest crypto exchange in the world, Binance, announced Thursday that it added a prediction markets feature to Binance Wallet.

Even traditional gaming firms are adjusting. FanDuel recently shut down parts of its fantasy sports offerings, a move Bank of America links in part to the rise of prediction markets. The shift suggests users may be moving toward products that resemble trading more than betting.

Ether’s (ETH) recent sell-off was stopped at $1,800, as bulls aggressively defended the level. Ether’s rebound above $2,100, along with on-chain and technical data, suggests that traders will hold the price above $2,000 for the short-term.

Key takeaways:

• Ether’s profitability metrics drop to levels that have historically marked local bottoms.

• The MVRV Z-score and pricing bands suggest ETH price drop to $1,800 was the bottom.

• ETH price bounced off a multi-year trendline that has marked previous macro lows.

Ether traders realize losses

Onchain data shows that Ether’s Spent Output Profit Ratio (SOPR) is at 0.96, suggesting ETH investors are still selling at a loss. 

This metric dropped as low as 0.92 on Feb. 6, implying that Ether’s price drop to $1,800 was driven by traders realizing losses amid panic and extreme fear.

Related: Ethereum stablecoin supply hits $180B all-time high: Token Terminal

SOPR measures the profit or loss of spent ETH outputs by comparing the value of coins when they were last moved to their value when they are spent again. 

A value below 1 might suggest capitulation or a market bottom, potentially signaling a good time to buy.

Historically, this scenario has often preceded price recoveries. When SOPR fell to 0.86 following Ether’s drop to $1,500 in April, it was followed by a 246% price recovery to its current all-time high of $4,950. 

Similar scenarios in 2022 and 2023 were followed by 130% and $155% ETH price rallies, respectively.

As such, some investors saw the drop to $3,000 as an opportunity to buy.

MVRV Z-Score suggests Ether bottomed at $1,800

Ether’s MVRV Z-Score, a key onchain metric used to identify market tops and bottoms, has dropped into the historical accumulation zone (the green line in the chart below), strengthening the argument that ETH may have found a bottom.

The last time Ether’s MVRV Z-score fell to the current levels was in April 2025, after a 66% price drawdown. This coincided with a macro market bottom at $1,400 and preceded a multi-month rally, with the ETH/USD pair rising 258% to its current all-time high of $4,950. 

Meanwhile, the 0.80 MVRV pricing band, which has historically marked cycle bottoms, is currently at $1,880. 

This indicates that, from an onchain perspective, Ether is undervalued and may continue the ongoing recovery, potentially rising toward dense liquidity clusters between $2,400 and $2,600 in the short term.

ETH price sits on strong support above $1,800

Data from TradingView shows that ETH price has successfully held above a key support zone over the last two months, as illustrated in the chart below.

This is the area around $1,800, where investors acquired more than 1.35 million ETH, according to Glassnode’s cost basis distribution heatmap.

This level aligns with a multi-year trendline that has historically marked the bottom for ETH/USD, as seen in 2022 and in April 2025.

Ether’s rebound from this level in early February suggests the trendline still holds as support, paving the way for a sustained recovery toward $4,800.

As Cointelegraph reported, a drop below $2,000, where the 20-day EMA and the 50-day SMA converge, could see the price drop toward the next major support at $1,750.