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eToro's CEO, Yoni Assia, announced the launch of a non-custodial crypto wallet integrated with prediction markets, partnering with platforms like Polymarket and Kalshi. He emphasized that prediction markets are still in early stages but align with eToro's shift toward wealth management alongside its trading services. Despite a 72% drop in crypto revenue in Q4 2024 due to reduced trading activity, Assia remains optimistic, noting that crypto investors often hold through downturns rather than sell. He highlighted behavioral differences between crypto and stock markets, where falling prices typically reduce crypto trading but increase stock trading. This expansion into prediction markets signals eToro's strategic focus on diversifying its crypto offerings while managing user risk exposure. For traders, the move could attract a new segment of high-risk appetite investors, potentially boosting platform activity. However, the long-term success of prediction markets depends on user adoption and regulatory clarity, which remain uncertain.
