Prediction market traders bet bitcoin's selloff has further to run
Kalshi and Polymarket traders expect more bitcoin downside, with heavy odds of sub-$55,000 and even sub-$50,000 prices this year.
Intelligence analysis by GPT-5.4 Mini
Prediction markets are pricing in more pain for bitcoin after its slide toward $65,000. The backdrop is ETF outflows, fading institutional demand, and capital rotating toward AI stocks and stablecoins.
People betting on bitcoin think the price may keep falling, like expecting a ball to roll farther down a hill. Some money is not leaving the game, though; it is moving into stablecoins, which are like parking cash in a safer spot.
Analysis
Bearish pricing in prediction markets
Traders on Kalshi are assigning a 66% probability that bitcoin falls below $55,000 this year, a 50% chance it drops under $50,000, and a 31% chance it sinks below $40,000. Polymarket is showing a similar view, with contracts implying about a 67% chance of sub-$55,000 prices and better-than-even odds of sub-$50,000.
ETF outflows and weak demand
The article ties the bearish shift to heavy withdrawals from U.S.-listed bitcoin ETFs. SoSo Value data cited in the story shows $2.4 billion left those funds in May and another $1 billion in the first two trading days of June. That suggests institutional appetite is weakening while bitcoin has fallen toward $65,000.
Competition from other trades
K33 Research argues bitcoin is also losing attention to AI-related stocks. Vetle Lunde said many investors see the opportunity cost of holding BTC as too high while AI names keep rallying and major equity indexes hit records. The article says K33 still sees bitcoin as undervalued versus equities over the long term, but traders are positioning for more downside first.
Cash is rotating, not exiting entirely
Even as traders bet against bitcoin, the article says money is not leaving crypto altogether. Instead, it is moving into stablecoins such as USDT and USDC, which the story describes as digital dollars. That points to traders raising cash and waiting rather than aggressively buying the dip.
Key points
- Kalshi traders see a 66% chance bitcoin falls below $55,000 this year.
- Polymarket shows similar odds and better-than-even chances of sub-$50,000 prices.
- U.S.-listed bitcoin ETFs saw $2.4 billion in outflows in May and another $1 billion in early June.
- K33 says bitcoin is competing with AI stocks for investor attention.
- Some crypto capital is rotating into USDT and USDC rather than leaving the sector.
If the selloff stops, the article suggests bitcoin could still recover because K33 views it as undervalued versus equities over the long term. The move into stablecoins also shows capital is still inside crypto, which could return to bitcoin if sentiment improves.
If ETF outflows continue, the article implies bitcoin could keep sliding toward the lower price targets traders are pricing in. Continued strength in AI stocks and equities could keep pressure on bitcoin by making it look like a weaker place to park money.
