Traditional Finance and DeFi Converge on Prediction Markets
The prediction market sector is facing a pivotal moment as major players from both traditional finance and decentralized finance (DeFi) move to capture market share from incumbents like Polymarket and Kalshi. On Monday, reports surfaced that Cboe, a leading derivatives exchange, is in early discussions to launch a product mirroring the "yes or no" structure popularized by prediction markets.
According to CoinDesk, Cboe is exploring these binary options to simplify trading for retail investors, directly challenging the dominance of existing platforms. This move signals the institutional validation of the outcome-trading model that has exploded in volume over the last two years.
Simultaneously, the DeFi sector is intensifying its own efforts. Hyperliquid, a high-performance decentralized exchange, announced plans to launch prediction market outcome trading alongside options. The market responded immediately to the news, with Hyperliquid's HYPE token surging 10% following the announcement. The Defiant reports that this expansion aims to consolidate outcome-based trading within Hyperliquid's existing perp-trading ecosystem.
Polymarket Hit with Regulatory Action in Nevada
While new competitors enter the fray, the industry leader is navigating fresh legal headwinds. A Nevada court has granted a temporary restraining order against Polymarket. This ruling adds to the complex global regulatory pressure facing prediction markets, as jurisdictions grapple with the classification of event contracts.
Traders tracking regulatory impacts via predictionmarketstools.com have noted that regional bans often trigger volatility in platform-specific volume, though global liquidity remains robust.
Bitcoin Sentiment Sours as Odds Shift
Amidst the infrastructure wars, actual market sentiment has taken a bearish turn. Data from Monday shows that the odds of Bitcoin slipping below $65,000 in 2026 have climbed to 72% on Polymarket. Analysts attribute this pessimism to tighter U.S. liquidity conditions.
However, contrarian strategies remain profitable for some. Ethereum founder Vitalik Buterin reportedly netted $70,000 by betting against "Crazy Mode" sentiment, proving that fading extreme market emotionality continues to be a viable strategy in prediction markets.