(Bloomberg) — Over the past decade, Wall Street has steadily shortened the lifespan of its trades. Options that once lasted months now sit alongside ones that last weeks, or even a single day.
Faster markets and better technology have made it possible to wager on shorter and shorter stretches of market action. Now, crypto traders are compressing that time even further — making bets that barely outlast a coffee break.
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On prediction markets platform Polymarket, you can bet on where Bitcoin will be five or 15 minutes from now. The rules are as simple as a coin flip: pick whether Bitcoin will be higher or lower when the clock runs out. Win or lose, it resets. Then do it all over again.
In little over a month, five-minute bets have become some of the busiest on Polymarket’s website, with as much as $60 million changing hands every day, according to user-compiled data on Dune Analytics. With each new shortening of the clock, turnover has surged and the advantage has tilted further toward participants with the fastest systems. Polymarket’s daily crypto markets — tracking whether Bitcoin will be above or below a certain price by the end of the day — pull in far less volume, often netting less than $1 million a day.
That speed has drawn waves of automated trading bots, run by both retail bettors running simple programs and more sophisticated participants with systems built for speed. While the volumes are small compared to the tens of billions of dollars traded daily on crypto exchanges, prediction market bettors are glued to their screens.
Jon Lourie, founder of prediction markets research firm Polyfactual, said it was election betting that first caught his eye when he began trading on Polymarket. But when he found out that those contracts could take months to resolve, he pivoted to sports markets, before landing on 15-minute crypto bets. The speed at which such trades conclude became “addictive,” he said.
“It’s like people just want to get to the resolution time faster and faster and faster,” Lourie said. “I wouldn’t be surprised if we see crazy things, like one-minute markets or something like that, in the near future.”
For professional traders, stacking your portfolio with bets that take days or weeks to expire can come with operational costs that add up quickly. Five-minute crypto markets could be a more cost-efficient way to hedge against risk held elsewhere, said Jake Brukhman, chief executive officer of crypto venture firm CoinFund.
“You want the hedging instruments to be as precise as possible and as cost effective as possible,” said Brukhman.
Crypto, which already trades around the clock, has taken that logic further. There is no bell to anchor the day, no overnight pause. Volatility that once played out over 24 hours can now erupt in five-minute intervals. The market has been sliced into ever smaller pieces, each one a fresh chance to win, lose, or get picked off.
On paper, prediction markets promise democratized access. The fact that anyone can participate is part of what makes them more accurate, harnessing the wisdom of the crowd to produce forecasts that can inform risk-taking and policy decisions.
In practice, shortened trading windows tend to reward those utilizing automation. A human tapping a phone screen cannot compete with software calibrated to exploit tiny price discrepancies in milliseconds. Polymarket charges a small transaction fee on its short-dated crypto markets, but redistributes a portion of those fees to whoever posted the resting orders that got filled. It’s a rebate that in theory is open to anyone, but in practice rewards those who can keep orders live around the clock, which overwhelmingly means automated systems.
“Because the time to expiry is very low, that means the price is just super volatile, and retail loves volatility,” said Annanay Kapila, a former quant trader who’s now chief executive officer of derivatives exchange QFEX. “If there wasn’t so much genuine retail demand, it wouldn’t be the only market that I know people are making a lot of money in on Polymarket, because it’s very inefficient.”
Speed bumps — small trading delays designed to encourage liquidity provision — are common on mainstream exchanges. In November, Polymarket introduced its own version — a 500-millisecond execution advantage for market makers on hourly and 15-minute crypto contracts. That edge was quietly removed in mid-February, according to traders who noticed the change.
Soon after, volumes across 15-minute durations started to slide. Weekly volume starting on Feb. 16 slumped by 45%, blockchain data showed, dropping from $260 million a week earlier to just $143 million. Even on five-minute bets where the speed bump hadn’t been implemented, daily volume on Bitcoin bets trended downward — though the arrival of new markets tracking smaller tokens like Ether, Solana and XRP helped bump up overall figures.
When markets are measured in minutes, half a second can decide everything. In Polymarket’s Discord chatroom, traders vented their frustration at the delay being removed. A Polymarket staffer later apologized for not announcing the change sooner, the messages show. On Feb. 25, the exchange rolled out a replacement — a new 250-millisecond delay across five-minute, 15-minute and hourly crypto markets.
Polymarket didn’t respond to a request for comment on the changes.
The platform’s crypto contracts rely on prices generated by a third-party oracle, which analyzes pricing from a variety of exchanges to come up with one final figure. In the world of digital assets, however, a single exchange, Binance Holdings, has long dominated pricing by generating the lion’s share of token trading volume.
Traders watching Binance’s price feed closely could, in theory, see moves before they show up on Polymarket. Each of Polymarket’s short-dated crypto contracts includes a disclaimer that live data can be delayed by a few seconds.
The result is a market that fulfills the prediction market promise of open access while quietly concentrating its rewards among those with the infrastructure to move fastest. Anyone can play. Not everyone can win.
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