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Prediction Markets are Growing. The tools and data need to be built.
I was catching up on $HOOD ( ▲ 3.84% ) prediction market growth alongside their partnership with Kalshi, but also their own prediction market infrastructure. I was reading this article and it made me realize just how big the opportunity is.
What if prediction markets become bigger than options or futures markets? Not the sports prediction markets, but the financial, economic, and every other event outside sports.
When I think about the opportunities its both on the retail and institutional side. From trade order routing, to analytics, to social copy trading, to leverage, to compliance, to data. A lot needs to be built. Lots are starting to build, some tools exist, but no winners have yet to emerge, as it’s too early. We likely will see more exchanges as well as more consolidation.
Where I Think the Biggest New Companies Could Be
Normalized data infrastructure (the "Bloomberg/FactSet for prediction markets")
Enterprise APIs for funds, AI models, and corporations
Execution and routing technology that aggregates liquidity across venues
Risk and portfolio analytics that integrate prediction exposures with traditional assets, allowing for scenario analysis and backtesting.
Hedging tools leveraging prediction markets
OTC market makers for prediction markets that lack liquidity
Vertical AI agents that monitor thousands of markets, explain probability changes, and recommend trades or hedges
Compliance that helps with monitoring insider trading
Retail apps that allow for agentic trading of markets while surfacing underpriced markets and large volume swings.
It’s early, but there is volume and interest. Good financial infrastructure takes years to build. Those buildings now just need to stay alive long enough for the markets to really grow.
You already have a take on which AI lab ships next.
Claude or Gemini? OpenAI or Anthropic? GPT-7 before year-end or not? If you read tech newsletters, you've already formed opinions on all of it.
Kalshi has real-money markets on which AI model leads benchmarks this week, which lab ships AGI first, when Anthropic releases Mythos, whether OpenAI raises ChatGPT pricing, and which company has the best coding model at year-end. These aren't abstract questions — they're live markets with real money on both sides, moving as labs ship, benchmarks drop, and announcements land.
The edge belongs to whoever actually follows this space. Not the casual observer — the person who reads model cards, tracks evals, and notices when a new release outperforms the field before the mainstream press catches up.
That person has a genuine edge. If that's you, Kalshi lets you act on it.