Prediction market traders are increasingly betting that bitcoin’s correction is far from over, even after the cryptocurrency tumbled as low as $65,000 this week amid growing pressure from ETF outflows and weakening institutional demand.
On Kalshi, traders currently assign a 66% probability that bitcoin will fall below $55,000 this year and a 50% probability that prices will be below $50,000. They also give a 31% chance that prices will even drop below $40,000.
Polymarket traders express a similar view. Contracts on the platform imply that there is about a 67% chance that Bitcoin will fall below $55,000 this year and there is a higher chance that it will fall below $50,000.
On prediction platform Polymarket, traders now give bitcoin just a 30% chance of outperforming gold in 2026. Gold is down about 1.5% last month but is up 33% in the last year while BTC is down about 37%.
This comes amid diminishing institutional appetite for the leading cryptocurrency. According to SoSo Value data, traders withdrew $2.4 billion from U.S.-listed BTC ETFs in May and $1 billion in the first two trading days of June, with the record outflow continuing.
At the same time, K33 Research says Bitcoin is also losing the battle for investor attention to AI-related stocks. As CoinDesk previously reported, in a report released Tuesday, the company said many investors view the opportunity cost of holding Bitcoin as too high, as AI-related companies continue to post outsized gains and major stock indexes reach record highs.
“Much of the market sees the opportunity cost of holding BTC as too high while everything related to AI is skyrocketing,” wrote K33’s Vetle Lunde.
Although K33 still views bitcoin as undervalued relative to stocks over the long term, prediction markets suggest traders are increasingly positioning themselves for lower prices before a recovery arrives.
As traders increasingly bet on Bitcoin prices falling, capital does not appear to be abandoning crypto entirely. Instead, it’s moving more and more toward digital dollars.
Both USDT and USDC gained market share during bitcoin’s plunge to $66,000, CoinDesk previously reported, a sign that traders are raising cash and waiting for better opportunities rather than immediately buying the dip.
