CashboardGlossary · Prediction Markets
What are prediction markets?
Prediction markets are exchanges for contracts that pay $1 if an event happens, so the price reads as the crowd's odds on that event.
How do prediction markets work?
A prediction market takes a question with a clear answer (a Fed cut at the next meeting, BTC above some price on December 31) and lists a contract for each outcome. The contract pays $1 if that outcome happens and nothing if it does not.
People with money on the line have a reason to be right. So prices tend to soak up news faster than polls do. The 2024 US election put the category in front of everyone, and volume has since spread well beyond politics, above all into sports.
The two biggest venues are Polymarket, which runs on Polygon and settles in a USDC-backed dollar token, and Kalshi, a CFTC-regulated US exchange that settles in dollars. The same question often trades at different prices on each. Different users and fees explain some of that. The rest is rule wording, and it catches people out: two markets that sound identical can resolve in opposite ways.
Say a Fed cut contract trades at 72 cents, which the market reads as about a 72 percent chance. Buy one and you collect $1.00 if the cut happens, a 28 cent profit. If it does not, the 72 cents is gone.
Also called: prediction market, event markets, betting markets, information markets.
Where do prediction markets show up in Cashboard?
The Prediction markets widget interleaves Polymarket's busiest events with open Kalshi markets in one list, each venue ranked by its own 24h volume. It opens on No sports, because on a weekend the volume ranking is almost all sports and buries everything else. Crypto, Macro, Politics, Sports and All are one click away. Each row shows the leading outcome as a percentage, and the widget labels these as market prices, not forecasts.
Frequently asked questions
Are prediction markets accurate?
Often, on liquid questions that lots of people follow. Thin markets are another story: a few traders can push them around, and the price only ever shows what the people trading believe.
Where can you read more about prediction markets?
Related terms
Last reviewed . Market data in Cashboard comes from the providers named on each widget and may be delayed. Nothing here is financial advice.