On February 15, 2026, Ethereum co-founder Vitalik Buterin voiced concerns about the direction of prediction markets, warning they are “over-converging” toward short-term, dopamine-driven bets such as crypto prices and sports gambling. The Block. As a Polymarket investor from its $45M Series B round, Buterin’s critique carries weight, highlighting a reliance on “money losers” with “dumb opinions” that risks sector collapse in bear markets, as he notes in his X post. This shift from information value to speculation threatens long-term sustainability, especially as platforms like Kalshi and Polymarket processed $44B in 2025 volume.
Buterin advocates transforming prediction markets into AI-driven hedging tools linked to real-world price indices for goods such as housing, food, and transportation. Users could run local AI models to analyse spending and create personalised prediction market baskets to improve stability, potentially replacing stablecoins and fiat with interest-bearing assets such as stocks or ETH. This builds on his prior ideas, including gas futures and AI-scaled governance, aiming for “long-term fulfilment” over fleeting bets. X posts from @VitalikButerin emphasise building “the next generation of finance,” not “corposlop.”
The critique arrives amid surging institutional interest, with Kalshi valued at $11B, Polymarket at $9B, and Jump Trading’s market-making deals. Coinbase’s nationwide prediction markets via Kalshi further legitimise the sector. However, Buterin’s warning underscores risks if platforms prioritise speculation over utility. Bitcoin ($113,234) and Ethereum ($4,070) remain stable, but a pivot to hedging could drive $1T in institutional flows by 2030. Regulatory clarity from the crypto bill headed to President Trump’s desk could accelerate this.
Buterin’s vision could redefine prediction markets as essential financial tools, blending AI with on-chain data for personalised risk management. Investors should monitor Polymarket and Kalshi volumes on CryptoQuant and explore AI-crypto integrations. Dollar-cost averaging into ETH with stop-losses below $4,000 positions for growth, TradingView. Follow @VitalikButerin on X for insights. While short-term speculation dominates, Buterin’s call for societal value signals a maturing, impactful 2026 for prediction markets.
