The World Cup final delivered its verdict on the pitch. On prediction markets, it marked the end of a multibillion-dollar speculative frenzy. After Spain’s 1-0 victory over Argentina, Kalshi and Polymarket’s cumulative open interest fell nearly 20% from its peak of around $2 billion reached in early July. This sudden decline reveals the dependence of prediction platforms on major media events and rekindles the debate on their ability to maintain user engagement outside of world events.
In brief
- The combined open interest of Kalshi and Polymarket fell by 20% following Spain’s coronation, marking the end of the speculative euphoria around the World Cup.
- The drying up of the sporting calendar causes weekly volumes to drop by 55% on Kalshi and by almost 70% on Polymarket.
- On Polymarket, two thirds of the 194,000 punters finished in the red, while a handful of 54 addresses generated more than $100,000 in profits.
- Open interest declines more slowly than volume because caps remain locked in until contracts officially close.
The sudden collapse of transactional volumes on Kalshi and Polymarket
The end of the World Cup caused a spectacular drop in transactional activity on the two main prediction platforms, Kalshi and Polymarket, where sports betting captured around 80% of overall volumes during the tournament. So, published data highlight the weekly figures linked to sport:
- Kalshi: Weekly volumes peaked at around $9 billion in the week of July 5, before crashing almost 55% to around $4 billion by July 19;
- Polymarket: Weekly volumes plummeted nearly 70% over the same period, from a peak near $2.3 billion to just $740 million.
This contraction can be explained by the internal mechanics of sporting competition and the progressive reduction in the supply of negotiable contracts. The group stage, which brought together 48 teams between mid-June and the end of this month, offered a density of daily meetings which fueled a permanent rotation of capital. As the schedule tightened during the knockout stages, the number of daily matches was reduced, causing the markets available to punters to gradually dry up until the World Cup final took place.
The empirical assessment of portfolios linked to the World Cup
The balance sheet analysis of participants in betting linked to this World Cup reveals a marked asymmetry in the distribution of profits and losses on these decentralized markets. The compiled data indicates that 194,000 unique addresses traded on the World Cup winner’s market, and about two-thirds of them suffered financial losses. The vast majority of balance variations remained contained below the $100 threshold, although extreme gaps were observed between the regular user base and a minority of very large players.
In the detail of this distribution, only 54 addresses generated more than $100,000 in net profits on this particular contract, among which five addresses managed to cross the $1 million mark in earnings. At the opposite end of the financial spectrum, 43 addresses recorded individual losses in excess of $100,000 at the conclusion of the competition. These statistics demonstrate that despite the apparent democratization of Web3 speculative tools among the general public, most of the net capital generated remains concentrated in the hands of an extremely small number of operators.
The resilience of open interest and the shift in market mechanics
On a purely structural level, the decline in overall open interest was significantly more moderate than the direct collapse in gross trading volumes. On a weekly smoothed basis, combined open interest increased from $1.2 billion at the end of May to nearly $1.8 billion for the week ended July 5, returning to around $1.5 billion in the week ended July 19. This difference between the two on-chain indicators can be explained by the technical nature of the metrics. Daily volume measures the immediate turnover of capital traded on recent matches, while open interest keeps the amounts locked.
Such a lag arises because the capital tied up in open interest is only released upon official settlement of the underlying markets. As long as the events are not formally closed by the validators, the positions remain recorded on the platforms’ balance sheets. Thus, while exchange activity stops instantly with the final whistle, financial disengagement occurs with natural inertia, spreading the contraction of capital committed over a longer period than the sudden drop in daily liquidity.
Following the world’s largest sporting event, overall activity in prediction markets is expected to enter a phase of relative lethargy in the absence of an immediate catalyst of the same scale to support user engagement. Retaining liquidity will be the primary challenge for these platforms until the next major attention cycle emerges, expected with the US midterm election campaign in the fall. If these protocols have proven their ability to capture attention during major events, their long-term valuation will depend on their ability to sustainably diversify their transactional themes beyond purely seasonal phenomena.
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