First, the AI trade stole bitcoin’s thunder. Now, the cryptosphere is losing some of its most-loyal traders to bets on soccer matches and congressional elections.

This year’s shift into highflying artificial-intelligence stocks (and out of bitcoin and other popular digital currencies) steepened a yearlong crypto slump. But it has been individual traders’ recent affection for prediction markets that is extending the crypto winter even as AI stocks wobble.

Prices on bitcoin, the world’s biggest digital currency, recently traded around $79,000. Even with a rebound in the last two weeks because of the Treasury’s expanded bond buyback program, it is still roughly 37%…