From betting to information: the rise of prediction markets.

Prediction markets are online platforms where people can place bets on the outcome of events — from elections to interest rate decisions or sports games. Each bet creates a price that reflects the likelihood of an outcome. The more people believe a certain candidate or scenario will win, the higher that price becomes. In this way, markets collectively predict the most likely outcome in real time.

The most prominent player is Polymarket, a platform born from the crypto world. It gained mainstream attention during the U.S. elections, when its predictions proved more accurate than many traditional polls. Major media outlets frequently referred to Polymarket’s statistics as a reliable indicator of public sentiment. This marked a turning point for prediction markets — from a gambling platform to a serious source of information.

Since then, Polymarket has grown exponentially. Trading volumes have surged, and the platform recently received a $2 billion investment from ICE, the parent company of the New York Stock Exchange. That deal valued the company at $12 billion, and its valuation has since climbed to around $15 billion.

The other major player is Kalshi. Unlike Polymarket, Kalshi wasn’t born in crypto, but it’s now actively integrating with it. The company also raised significant funding rounds this year and is valued at around $12 billion. Together, these two platforms dominate the prediction market industry.

A big reason for their explosive growth is that both are expanding their scope. Initially focused mainly on political events, they are now entering the much larger sports betting market — a space traditionally dominated by FanDuel and DraftKings.

Prediction markets themselves aren’t new to crypto. The concept dates back to 2017, when Augur became the first decentralized prediction platform. But it wasn’t until the recent U.S. elections that the idea truly broke through.

The power of prediction markets lies in their open design. Anyone with an internet connection and a crypto wallet can participate, enabling global price discovery that often proves highly accurate. According to Polymarket, its forecasts are 91% accurate a month in advance, and 95% accurate within the final four hours before an event.

What began as a niche within crypto has now evolved into a mature industry. Prediction markets show once again how crypto continues to serve as an incubator for entirely new sectors — and for investors, this space may still be in its earliest innings.