Perps and Prediction Markets Are Not the Same Trade

The article argues that perpetual futures (perps) and prediction markets serve different trading needs and are complementary rather than competing. Perps provide continuous, leveraged directional exposure but carry liquidation and funding risks that punish mistimed correctness. Prediction markets price binary event probabilities, cap downside at entry, have no margin calls, and enable traders who avoid margin mechanics to express macro or event views. Growth metrics and institutional interest—prediction-market volume exceeding $63 billion in 2025, a March 2026 monthly peak near $25.7 billion, Polymarket’s reported >94% early accuracy, Kalshi’s $178 billion annualized volume and $22 billion valuation, and ICE’s investment in Polymarket—signal mainstreaming. Phemex launched an integrated prediction-market product in April 2026, allowing users to hold BTC perps and event positions in one USDT account. The market impact: prediction markets are maturing into a distinct, institutionalized liquidity pool that complements crypto derivatives and broadens who can participate in market-based forecasting.