It's not speculation; it's a necessity. The four unique values of the predictive market.

Original | Odaily Planet Daily (@OdailyChina)

Author | Wenser (@wenser 2010)

Recently, Polymarket completed a $400 million funding round, with its valuation rising to $15 billion. According to statistics, the nominal trading volume of prediction markets is projected to reach $25.7 billion in March 2026, up 10.6% month-over-month from $23.2 billion in February 2026; while in October last year, this figure was only $8.7 billion. Amid the up-and-down swings in the crypto market driven by macroeconomic factors and regional conflicts, prediction markets have become the most eye-catching segment in the crypto space. With prediction market trading volume still maintaining rapid growth, and combined with Odaily’s earlier article “Why Prediction Markets Are Really Not Gambling Platforms,” perhaps it’s time to talk about the unique value of prediction markets to set the record straight.

The Unique Value of Prediction Markets: Entertainment Consumption, Insurance Value, Risk Hedging, and Truth Machines

What inspired me to look at prediction markets from the perspective of “non-gambling value” was a post published yesterday by Bitwise advisor Jeff Park titled “Most People’s Misunderstanding of Prediction Markets.”

In this long article of several thousand words, Jeff Park pointed out the similarities and differences between prediction markets and stock picking as well as poker games, and gave positive recognition to their attributes of entertainment consumption, financial innovation, and precise information.

If the article “Why Prediction Markets Are Really Not Gambling Platforms” carried out a detailed comparison between prediction markets and gambling platforms from the perspectives of price mechanisms, differences in purpose, user composition, and regulatory logic, then what we need to clarify today—using this article—is its value in diversity.

Entertainment Consumption Stimulates Economic Development

In “The Theory of the Leisure Class,” American economist Thorstein Veblen believed that the essence of the leisure class is not simply enjoying leisure, but rather using exemption from labor and lavish spending as a symbolic system to gain prestige. The alienation of people under capitalism through money is accomplished precisely through various forms of consumption.

And today, the value of consumption is also obvious.

In a modern society with a clear division of labor, consumption is a necessary process of value exchange. Entertainment itself is a type of economic consumption and one of humanity’s pursuits that distinguishes people from machines. Taking the sports industry alone as an example, its industry-wide output value is on the scale of $1 trillion; taking the sportswear brand NIKE as an example, on the one hand, they earn profit by controlling supply chains, manufacturing products, and completing sales; on the other hand, they also shape the sports industry in return by sponsoring teams, endorsements, and sports events. Based on the real-world performance of various sporting events and athletes, placing bets in prediction markets is also a form of entertainment that stimulates mental consumption—and this in turn affects prediction market users as well as the general public’s attention to sporting events, consumption of sports brands, and spending on spiritual entertainment.

Limited Insurance Protects Individuals’ Interests

As Jeff Park proposed in “Most People’s Misunderstanding of Prediction Markets”: “The value of derivatives lies in allowing risk to be transferred, which means that speculators belong to the insurance side (Odaily Planet Daily note: the policyholder transfers uncertainty risk to the speculator who assumes the risk in exchange for a certainty-cost). But in reality, government intervention distorts the true market price of insurance holders, which leads to insurance default. Without government intervention, there is no other way to transfer risk in a transparent and open market.”

In this regard, two major advantages of prediction markets compared with conventional derivatives stand out: first, the event precision of prediction markets; second, the limited time horizon of prediction markets. The former means that prediction markets are a binary, clearly defined proposition, with no room for estimating ambiguous losses; the settlement conditions are completely transparent and verifiable. The latter makes it clear that the outcome of prediction markets is not an artificially set contract deadline.

In addition, as Jeff Yass, founder of SIG (Kalshi’s official market maker), mentioned in a previous interview, “To some extent, prediction markets play the role of a ‘new kind of insurance.’ In Florida, where hurricanes are frequent but insurance is capped, users can effectively take a reverse insurance approach by using prediction market bets on the weather market question of whether the wind speed in a given area exceeds 80 miles per hour. This channel also does away with complex steps in traditional insurance such as claims, operations, and marketing costs.”

In summary, prediction markets are able to bring participants a value of protection in which the costs are clearly defined through well-defined betting events, along with a guarantee to follow the facts and the pursuit of truth.

Risk Hedging to Respond to Event Crises

Not long ago, Kalshi announced the official launch of a 24/7 commodities market, providing price prediction services for commodities including crude oil, diesel, gold, silver, copper, lithium, natural gas, sugar, soybeans, wheat, corn, coffee, cocoa, live cattle, and more.

Citadel Securities president Jim Esposito also said recently at the Semafor World Economic Forum in Washington that the company could provide liquidity to prediction markets, but compared with sports events, it values the value of prediction markets more for hedging geopolitical risks. Using this year’s November U.S. midterm elections as an example, he said the event would be “one of the biggest risks faced by investors’ portfolios,” while prediction markets would become a new tool for institutions to hedge risks.

From this perspective, investors can achieve risk hedging by holding “NO”-related chips in events on prediction markets. They can respond more flexibly to risks such as commodity price rises and falls and changes in the economic situation. Combined with the political situation sector, where trading volume has surged since the Iran–U.S. conflict began on February 28, prediction markets have already been playing the role of a risk-hedging tool for both individuals and institutions.

Truth Revelation to Counter Media Bias

Beyond the value above, from the standpoint of information pricing, the role of prediction markets in addressing the public media’s agenda-setting and media bias cannot be ignored either.

American writer and media editor Ashley Rindsberg previously provided a detailed review of the negative impact of The New York Times on many historical events in his book The Eye of the Beholder: How The New York Times’ Misinformation, Distortion, and Fabrication Changed History. In it, he lists numerous institutional failures over the past several decades, including the repression of Stalin’s famine in Cuba’s Durlandi Town, Castro’s sudden rise, Iraq’s weapons of mass destruction, and Hitler’s rise. In these historical events, The New York Times blurred the pursuit of the truth of events for purposes such as information-channel considerations, ideology, and institutional self-protection, ultimately producing a series of negative consequences.

Although, at present, many of the event-judgment rules in prediction markets still heavily rely on media, as industry platforms develop, information transmission speeds up, and the reach of event contracts expands, prediction markets are expected to become a real “truth machine” to address a range of biases produced by media due to reasons such as individual staff preferences, work processes, ideology, and platform interests.

Previously, Crypto.com COO Ericnode stated that prediction markets could become a trillion-dollar market, because users have direct vested interests, and their accuracy can be 30% higher than that of surveys.

In the not-too-distant future, the roles, functions, and value that prediction markets can realize will be far more than what we previously imagined.

Recommended reading:

Most People’s Misunderstanding of Prediction Markets

Why Prediction Markets Are Really Not Gambling Platforms

SIG Founder Jeff Yass on the Value of Prediction Markets