Ethereum co-founder Vitalik Buterin has revealed that he made $70,000 last year on the prediction market platform Polymarket by employing a strategy he describes as “anti-insanity mode.” This approach focuses on betting against irrational market behaviors. Buterin shared these insights during an in-depth interview with Foresight News in Chiang Mai, where he also expressed concerns regarding the stagnation of crypto applications despite notable advancements in technology.
Buterin”s profitable strategy involved identifying markets that he deemed to be operating in “crazy mode.” He made bets against events he considered unlikely, including a wager against Donald Trump winning the Nobel Peace Prize and the dollar collapsing to zero during periods of market panic. His remarks come at a time when the adoption of prediction markets is increasing significantly, with Polymarket app installations reportedly surging by 1,200% from January to December 2025. Weekly trading volumes on various platforms have also skyrocketed from $500 million to nearly $6 billion.
Buterin”s Concerns for the Crypto Industry
Buterin articulated three primary concerns that are shaping his vision for the future of Ethereum and the broader crypto ecosystem. His foremost worry is the risk of the cryptocurrency industry devolving into a realm solely focused on speculation, devoid of any genuine applications. “My biggest fear right now is that the entire industry will eventually degenerate into a place for 100% cryptocurrency speculation,” he stated.
His second priority emphasizes the need for improvements in Ethereum”s technology, particularly enhancing the efficiency and decentralization of Layer 2 networks while striving to match the user experience of Web2 platforms. Furthermore, Buterin warned that failure in the crypto space could lead to a future dominated by centralized artificial intelligence, which he views as a potential threat to freedom and diversity within the technological landscape.
Stagnation in Application Development
Despite significant advancements in Ethereum”s scaling capabilities—such as increasing gas capacity from 30 million to a target of 300 million—Buterin expressed disappointment over the stagnation of application development. He pointed out that prediction markets appear to be the only sector experiencing notable growth in 2025. However, he criticized platforms like Polymarket for their focus on short-term bets, such as minor fluctuations in Bitcoin prices or weekly sports results, arguing that such activities lack social significance.
Instead, Buterin advocates for long-term incentive mechanisms, drawing attention to concepts like Futarchy, currently being tested by MetaDAO, where prediction markets could play a crucial role in governance decisions rather than merely serving as betting platforms. He highlighted the need for decentralized social networks and more sophisticated decentralized autonomous organizations (DAOs) that go beyond mere token-based voting.
Oracle Vulnerabilities and Market Reliability
Additionally, Buterin raised alarms about the vulnerabilities present in current oracle systems, which could jeopardize the reliability of prediction markets as adoption escalates. He recounted an incident involving a prediction market related to the Ukrainian conflict, where an update from the Institute for War Studies erroneously indicated Russian control over a train station, causing a significant market reaction that was later retracted.
Current oracle solutions are fraught with limitations. Centralized models, like those from Bloomberg, require trust in a single entity, while decentralized token-voting systems suffer from manipulation risks that can distort outcomes. “Even if you vote for the truth, if you oppose the majority, the system will judge you as the loser and you will lose money,” Buterin explained, illustrating the challenges facing participants in these markets.
Despite these warnings, the prediction market economy is thriving. Polymarket has relaunched in the U.S. following approval from the CFTC, introducing low taker fees and expanding access to users on its waitlist. The company has also secured substantial investments, achieving a valuation of nearly $9 billion.
