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Prediction markets are making a comeback, attracting big exchanges, brokerages, and crypto-native startups. Yet, questions remain about whether these platforms can grow into reliable, lasting sources of insight.<\/p>\n
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It\u2019s quite hard to miss the noise. Prediction markets are back in the headlines, and this time the players include established exchanges, mainstream brokerages, and a fresh wave of crypto-native startups.<\/p>\n
Politics, finance, and sports are all on the menu. Polymarket and Kalshi are expanding their product sets, brokerage giant Robinhood is layering prediction contracts into its app, and a Coinbase-backed team just raised a high-profile seed round to build a regulated, on-chain alternative.<\/p>\n
Still, the same doubts that trailed earlier attempts haven\u2019t evaporated. Can these markets scale into useful, durable sources of information, or are they mostly a venture cycle of hype, liquidity, and caution?<\/p>\n
This summer, a new entrant called The Clearing Company announced a $15 million seed round led by Union Square Ventures and joined by Haun Ventures, Variant, and Coinbase Ventures as it seeks to build \u201cthe first on-chain, permissionless and regulated prediction market.\u201d The startup, founded by a former Polymarket executive, pitches itself as a way to marry decentralization with the compliance that institutional and regulatory partners demand.<\/p>\n
At the same time, Polymarket \u2014 which has been the most visible crypto-native prediction platform \u2014 signaled a renewed push into the U.S. market after a strategic investment from 1789 Capital and the addition of Donald Trump Jr. to its advisory board.<\/p>\n
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Retail channels are piling in too. Robinhood added prediction markets to its app \u2014 starting with pro and college football \u2014 and treats them like tradable products, not betting slips. Users get live prices, can change or close positions during a game, and use the same onboarding and payment flows they already know from stock trading.<\/p>\n
The growth has attracted attention beyond investors and founders. Regulators are upgrading their toolkits as the CFTC is deploying Nasdaq\u2019s Market Surveillance platform to get a more granular view of trading behavior across derivatives, crypto, and event markets. That move is aimed squarely at detecting manipulation, wash trading, and other abuses that could undermine public confidence if prediction markets go mainstream.
CFTC.<\/p>\n
Leagues and leagues\u2019 partners are watching too. For instance, the NFL publicly warned<\/a> that open markets on game outcomes could create integrity risks if they lack the monitoring and information-sharing frameworks that legalized sportsbooks use.<\/p>\n Even with money and users flowing in, a lot of designers and economists say the real problems are baked into how these markets work, not just the rules around them. Works in Progress, the Stripe-backed magazine focused on economics and market design, published a May 2024 essay arguing<\/a> that \u201cwithout savers or gamblers to add volume to the market, the market cannot attract enough sharps to create the liquidity to drive prices toward accuracy.\u201d<\/p>\n Basically, without steady money or a flood of gamblers, these markets stay niche, the article reads.<\/p>\n That critique maps onto today\u2019s data. Where prediction markets do meaningful volume \u2014 elections, a handful of macro hedges \u2014 they tend to concentrate in the weeks before resolution, and most contracts never reach sizes that make professional market-making profitable.<\/p>\n Without that liquidity, prices can be noisy. Without savers, there seems to be no persistent pool of capital to anchor markets, and without gamblers, there\u2019s little retail churn to widen participation. The result is small pools, wide spreads, and limited incentive for the whales whose research would tighten prices.<\/p>\nStructural limits<\/h2>\n
Beginning of something bigger<\/h2>\n