At times, making crypto predictions on platforms such as Polymarket or Kalshi can feel a lot like sports betting. Instead of rooting for your hometown team to come away with the victory, you're rooting for your favorite altcoin to hit a certain price target.
But here's the thing: Treating crypto trading like sports betting could be the fastest way to lose money. If you're planning to build a long-term nest egg for retirement, there's a better way to use prediction markets to your advantage.
The wrong way to use prediction markets
It's staggering how many different ways you can bet on Bitcoin (BTC 1.11%) these days. You can predict that it will hit a certain price target by a certain date. You can predict that a certain event will happen, such as an S&P 500 company deciding to add Bitcoin to its balance sheet. You can predict whether Bitcoin will outperform a certain asset class (such as gold) within a specific time frame.
Or, if you're feeling really daring, you could bet on all of them at the same time. In sports betting parlance, this would be called a "parlay" because multiple bets are involved at one time. And there's no quicker way to lose money than betting on multi-leg parlays.
Image source: Getty Images.
Where things get really dangerous is when traders start to let their emotions get the better of them. Just like sports gambling, it's easy to get caught up in the moment. When an altcoin has momentum -- either to the upside or the downside -- it's easy to assume that the momentum will continue.
But how many times have you watched a sporting event, only to see momentum turn on a single play? Real-time odds can change in a hurry.
There's another danger, too. In addition to making long-term predictions about the price of Bitcoin, it's also possible to make ultra-short-term predictions about the price of Bitcoin. As in: "What will be the price of Bitcoin in 5 minutes?" Good luck if you think you can consistently make money doing that. It's a bit like trying to guess the outcome of the next play in a football game.
The right way to use prediction markets
A better approach is to use data contained within these prediction markets as yet another input in your long-term thinking. As New York Stock Exchange President Lynn Martin recently said at a crypto event, prediction markets can help to calculate the real-time statistical probability of any future event occurring. For that reason, prediction market data can be superior to data from polls or surveys.
But just be careful: Some data from prediction markets might not be as precise as commonly supposed. In a January 2026 research report, Galaxy Digital found that prediction markets tend to overstate consensus in the financial markets. It's often hard to collapse a full set of beliefs, convictions, and assumptions into a binary yes/no outcome.
Can you make money in prediction markets?
Admittedly, making accurate predictions about any cryptocurrency can provide a real adrenaline rush, like investing in a hot altcoin that continues to soar in value, or placing a wild sports bet that happens to hit big.
And that's what has me worried. Recent Motley Fool research shows that sports bettors lose an average of $6 for every $100 bet. Will people lose a similar percentage of their money betting in prediction markets?
