🥛 How to win on prediction markets 🔮

GM. This is Milk Road Degen, the crypto newsletter that’s placing bets on the future, because why wait to say “I told you so”?

Here’s what we got for you today:

✍️ The next crypto gold rush: prediction markets
🎙️ Milk Road Degen Podcast: This Guy Made $1M+ on Virtuals and Why He's Still Bullish! w/ Nick
🍪 Likely one entity pulled $48.2M in $SOL from Coinbase Prime

$FUN is one of the leading tokens in Web3 gaming. Discover how it’s powering the next wave of innovation.

Prices as of 8:00 AM ET.

THE NEXT CRYPTO GOLD RUSH: PREDICTION MARKETS

What up, degen.

You’ve probably noticed: prediction markets are having a moment. CT is flooded with them. Everyone’s talking about Polymarket, Kalshi, and betting on everything from rate cuts to TayTay.

Hell, even Mr. Beast is on Polymarket now.

Source: @shayne_coplan

But let’s not get it twisted. If you’ve been with Milk Road Degen since day one, you know I've been in these markets for months.

Source: @LgDoucet

In fact, the very first edition of this newsletter was about Polymarket plays. LG was early, baby.

But I’m writing this now because I’m seeing some very smart people rotate into this space. And I’m starting to believe that prediction markets could be the next sticky vertical in crypto - not just a passing meta.

So let’s dig into where things are at, how to actually win, and how to get started if you’re late to the party.

Where prediction markets are at

One weird thing about this trend: people are realizing that all of crypto is a prediction market.

Perps on Hyperliquid? Just predicting future prices.

PumpFun? You’re betting on whether a meme makes it to $100M.

Even fantasy soccer platforms like FootballFun are being called “prediction markets” now (lol).

But let’s narrow the scope. When I say “prediction markets”, I mean the actual apps that let you bet directly on real-world outcomes: elections, court rulings, sporting events, pop culture drama.

Polymarket is the clear king here. It’s the Facebook of this space. They raised over $200 million, partnered with X (so you’re already seeing Grok data overlays in their markets), and most importantly they’re now operating legally in the U.S.

That’s a massive unlock.

Their sports vertical is growing like crazy, and I wouldn’t be surprised if in-app betting on X becomes a thing in the next few months.

Source: @yekiM_o

Kalshi is the natural #2. It’s cleaner, regulated, and also raised a ridiculous amount of capital.

Beyond that, you’ve got Myriad (built by the Rug Radio team), followed by a host of wannabee-contenders who offer unique market primitives but have yet to launch and/or gain traction:

Melee Markets: PumpFun x prediction markets
OpinionsFun: Tokenizing “hot takes” on X
Noise: Perps for signal on X, which will be live on MegaETH soon (love this one tbh)

Lots of people are building here, but that’s not actually why I’m so bullish.

I’m bullish because prediction markets are a primitive that will survive all cycles and downturns. It doesn’t matter if $BTC crashes back to $20k tomorrow: you’ll still be able to tokenize IRL outcomes and bet on them. It's kind of like an extension of the stablecoin family (digital money -> digital bets).

Unlike NFTs or memecoins, prediction markets have a never-ending stream of content to bet on. There will always be elections, sports, pop culture drama. This sector can stay hot for a very long time.

Source: @EasyEatsBodega

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THE NEXT CRYPTO GOLD RUSH: PREDICTION MARKETS (P2)

How to win on prediction markets

I know what you’re thinking, and trust me I’ve been there too: I suck at predicting things.

That’s ok. I want to outline that beyond cosplaying as Nosferatu, you can actually make money here in a variety of ways. Even just betting on the trend is relatively simple.

Strategy #1: Small swings

Some traders win by positioning early - getting into a market before major news breaks. Remember that you don’t need to be 100% right to win on platforms like Polymarket: you just need the public prediction to change.

For example: If you think the Fed will possibly cut rates by 50+ bps next week, you could buy this “yes” at $0.15 and ride it to $0.30 for a 2x. All you would need for that to happen is a big report that they might cut those rates. No need to nail the final outcome - just need to bet on the opinion shift.

Source: Polymarket

Strategy #2: Long game on unlikely outcomes

Similar to strategy 1, you can play a longer game on longer-tailed outcomes using limit orders.

As a Milk Road reader, I’m sure you’re very close to the current price action of Bitcoin: you know we’re ready to either rocket launch up, or potentially knife down. The latter would probably cause a mass over-reaction, and predictors would panic. Same with the opposite: bulls would get overexcited if we moved back up to the 120s.

In comes the opportunity. Look at this chart.

Source: Polymarket

I’d bet on the outside odds here: Take a position on “Yes” for 140,000 at $0.38, and set a limit sell at $0.60 for a 50% gain. You wouldn’t even need $BTC to get there; you would just need it to pump for those odds to rise. The “Yes” was at 60% as recently as August 13, 2025!

Source: Polymarket

Strategy #3: Arbitrage across platforms

Markets are often inefficient, especially with new narratives. Similar to how sports betting used to be (it's now highly efficient for everyday bets), you could grind away and find 1-5% market differences between Kalshi and Polymarket. It's basically a no-loss scenario if you can nail the right bet with the right liquidity, although not as “sexy” as actual betting.

Heck, I think a golden opportunity would be a delta-neutral aggregator app for prediction markets. One that runs the arbitrage for you and finds the small margins. Who is gonna build this??

Source: @LgDoucet

Strategy #4: Airdrop farming

None of these platforms have tokens yet, and I doubt any of them will for a very long time. Like I said, these markets are impervious to changes in crypto, and ideally their tokens will be as well. I’d love to see Polymarket drop their rumored token in a downtrend; would be a good opp to scoop some for the long term.

The only way to do this is volume. And tbh, my numbers are pathetic. But I need to nail more bets consistently before adding more size. That, or just look for 0-2% changes on bets and go with size to farm total volume.

Source: LG’s polymarket account.

Strategy #5: Bet on Sports x AI

We know that traditional sports betting is difficult unless you’re very sharp; yet it's one of the fastest growing markets of the last 10 years. It’s everywhere.

So why not buy into AI agents that capitalize on the volume and insights from this much larger industry, and give you an outsized edge?

To name a few:

$SIRE: Sports-tracking tech set to go live any day now with vaults and staking.
$BILLY: Betting insight aggregation with direct Kalshi/Polymarket integration
$BRACKY: A sports-betting companion for the more active trader.

Note: These are all on Base, and I like using Definitive to buy there. My referral code.

And it doesn’t stop at sports: the Crypto AI space is full of promising agents, all with different angles to cover from DeFi to assistants.

Source: @Chyan

Getting started

If this is all new to you, go read my original Polymarket piece. It breaks down the basics and shows how to get in with just a few USDC.

From there, pick a theme. Are you a politics guy? Sports? Pop culture? Find a niche you understand and start monitoring the markets.

I highly recommend following these tools and accounts:

Moby Screener has a Smart Money feed for prediction markets
Polysights posts wallet data and insider trades
Kaito just added prediction markets to their mindshare board.

And most importantly: just get started. Place some small bets. Even $10-$50 per position is enough to learn and stay engaged. Remember that these aren’t like memecoins - you’re not looking for a 100x. You’re just looking to win steadily and be part of the uptrend.

Wrapping up

Here’s the reality: a lot of these markets are super thin and wildly manipulated. Many of the more fringe prediction markets are completely illiquid. And when you win, it’s often a slow grind.

So yeah, the best strategy is often the most boring one: small bets. Buy at $0.10, sell at $0.20. Profit off vibes and sentiment shifts.

Or skip it entirely. But if you are going to play, start now - because this is a rare moment where a quiet, weird niche of crypto is suddenly heating up. Could be nothing. Could be everything.

Stay fresh, degen.

THE AI TOKEN WHISPERER 🎧

We sat down with Nick Plays Crypto, former anon, now full-time dad and part-time degen, to break down how he pulled 300K+ in profits from obscure AI tokens you’ve probably never heard of. Spoiler: he didn’t get lucky.

Here’s a peek inside: