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What is a prediction market Learn what prediction markets are, how they work, and why millions of people now use them as an information/news source and investment tool. Prediction markets, also known as betting markets, information markets, decision markets, idea futures, gambling, or event derivatives, are open markets that enable the prediction of specific outcomes using financial incentives.
Prediction markets are online platforms on which participants trade contracts based on a binary outcome, such as an election You’ll also see where they are legal, how people use them, and what to expect from this growing space in 2025 and beyond. Unlike equity or futures markets, prediction market contracts are not based on an underlying asset that holds intrinsic value.
Prediction markets are designed to harness the “wisdom of the crowd” to forecast future events, ranging from political elections and economic indicators to product sales and scientific.
“prediction markets are markets where you can answer any question about the future,” she said “because you're trading on the outcome of an event, that price becomes the best forecast of that event happening.” In this guide, you’ll learn what prediction markets are, how they work, and how they compare to regulated products like event contracts
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