Prediction Markets | From Betting Platforms to Financial Infrastructure

Prediction markets have emerged as one of fintech's fastest-growing segments, with monthly trading volumes reportedly surging from roughly $100 million to over $13 billion in just two years. Platforms like Polymarket and Kalshi allow users to wager on binary outcomes spanning politics, economics, and pop culture. While these markets demonstrated notable forecasting accuracy during the 2024 US presidential election, significant structural challenges remain before they can transition from speculative venues to credible financial instruments. Key obstacles include insider trading vulnerabilities, fragmented regulatory oversight, and persistent liquidity constraints that undermine price discovery. The path forward likely depends on clearer regulatory frameworks and a strategic pivot toward economic event contracts that complement traditional derivatives markets.

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