On Polymarket and Kalshi, five-minute crypto bets now dominate prediction flows

Polymarket and Kalshi are at the forefront of a trend seeing the rise of ultra-short-term bets on cryptocurrencies. These platforms now see such contracts dominate over half their crypto trading. Contracts range from five to fifteen minutes on major crypto assets like BTC and ETH. Retail traders utilize AI tools for real-time analytics, while HFT firms leverage latency for profits. Despite the speculative nature, these practices still fall under 'hedging' as per regulators. However, concerns are growing around this shift towards what some are calling 'pure gambling'. The trading volume for these short-duration bets is significant, with daily figures reported around $70 million. Polymarket recently introduced trading fees to manage the influx of bots and maintain revenue streams. Despite added fees, trading volumes have continued to rise. Regulators, so far, have maintained a stance defending these short-term contracts, while some industry insiders argue they inject excessive speculation into the crypto trading ecosystem. Traditional exchanges have started to take note, and Nasdaq is even considering dipping into this market style. The trend seems to point to a convergence of trading and entertainment, echoing the dynamics of Wall Street in the digital asset space.