November 5, 2024 — Election Day for the US presidential race. Nearly every news poll showed a "toss-up." Polymarket, however, kept displaying a 67% probability of a Trump victory. In the end, Polymarket's "bet" was right. Since then, CNN, CNBC, Google Finance, and The Wall Street Journal have begun officially citing Polymarket and Kalshi data. Prediction markets, long regulated as "gambling," have become mainstream financial information infrastructure.
A prediction market is a market where participants bet money on whether a specific event will happen. The mechanism is simple: for a question like "Will the US strike Iran by February 28, 2026?", participants buy and sell "Yes" or "No" contracts. A price of $0.67 means a "67% probability of Yes." Once the outcome is confirmed, $1 is paid out ...
