#381: The Grand Integration of Prediction Markets

🔮 Prediction markets are here to stay. What could future expansion look like?

The rise, sustained relevance, and expansion of prediction markets

It was only about a year ago when Polymarket was off to the races, with market volume peaking thanks to the 2024 US presidential election. Fast forward a year later, volume has dropped but held impressively as other categories have expanded to fill the void.

The prediction market platform has added new features to complement the topical expansion. Recently the platform introduced a breaking news tab, highlighting markets that have moved the most in the last 24 hours.

Polymarket also has a dashboards section focusing on different categories or subcategories of prediction markets, such as elections, macro, sports, fed rates, and Trump.

The breaking news tab is interesting as it subconsciously pushes the positioning that it is the future of news in 3 different ways:

1. Markets that moved the most: Front and center are the prediction markets that have moved the most in the past 24 hours, suggesting there have been updates and news related to those topics

2. Email newsletter: A CTA and form fill for Polymarket’s newsletter highlighting the largest market moves

3. Polymarket’s X account: Posts from Polymarket’s X account sharing breaking news and new prediction markets

On top of this, Polymarket also announced the acquisition of QCEX, allowing it to re-enter the US.

Prediction markets are expanding to adjacent audiences

Polymarket isn’t the only prediction market gaining ground. Robinhood launched a prediction markets hub earlier this year and just announced new pro and college football markets, powered by Kalshi. Just in time for the upcoming season! 🏈

Polymarket is gearing up to do the same as well.

Meanwhile, CME announced a partnership with FanDuel to bring an event contracts platform (aka prediction markets), allowing FanDuel users who are accustomed to betting on sports to hold positions on benchmarks “such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI”.

Where are prediction markets headed?

Prediction markets have reached a degree of credibility and relevancy in an undeniable way. Where are they headed next and what are some themes that will emerge as they continue to partner and integrate their way into mass market expansion?

From a mainstream POV… (if you want a more crypto-native lens of where prediction markets are headed, FOMO Hour had John Wang on as a guest with lots of great nuggets)

The order of operations for news is shifting

Generally speaking, the order of operations with news has been:

News story breaks ➡️ Market/audience reaction

In a world rife with information asymmetry and now prediction markets, it is now shifting and becoming more complex, turning into some version of:

Prediction market moves ➡️ Market/audience reaction ➡️ news story breaks ➡️ market/audience reaction

An example of this Polymarket’s ‘Who will perform at Super Bowl halftime show?’, with the odds of Taylor Swift getting the job surging as high as 82% on August 16th.

Most online news outlets didn’t catch onto these rumors until days later

Prediction market movements already are and will have a larger role in informing news stories and what is newsworthy, even if the subject in question isn’t officially confirmed.

Prediction markets will appear alongside the news

If prediction markets are the future of news, they’ll become integrated into news platforms themselves. An example of this is Decrypt’s integration of Myriad Markets (both are owned by the same parent company, DASTAN).

For example, in an article about XRP, we see a prediction market about XRP’s price on the lefthand panel.

It’s not surprising to see this on a crypto news site (especially one that has a prediction markets product), so the bigger question is which major news outlet will add prediction markets…and when? (the answer is yes 😉)

News outlets will partner to create branded prediction markets

If we start seeing more news outlets put prediction markets next to news stories, it will likely only be a matter of time before we see white-labeled and branded prediction markets pop up.

This will serve two primary purposes:

• Incremental revenue stream - News outlet earns revenue (split with prediction market partner) on volume traded

• Marketing tactic - News outlet can have branded prediction markets hosted on the partner’s site/app, aka: “brought to you by ______”

If you’re thinking this is such BS I get it, but it’s already happening. X announced that Polymarket would be their official prediction market partner:

As part of the agreement, Polymarket and 𝕏 are launching an integrated product to deliver data-driven insights and recommendations to Polymarket. Polymarket predictions will be combined with 𝕏 data to provide live insights, incorporating real-time annotations explaining market moves directly from Grok and relevant 𝕏 posts. The product, launching today, will be the first of a suite of integrations and unique experiences that Polymarket and 𝕏 will jointly develop via the partnership.

So….prediction markets in the X app? 🤷‍♂️

And if you’re still skeptical, we can look to another industry that’s a couple steps ahead: sports betting.

ESPN BET launched in 2023 through a partnership and rebrand of PENN Entertainment’s sportsbook, and now ESPN BET is sprinkled into ESPN content in a variety of ways.

So if sports betting has laid out the playbook, is it that farfetched to see CNN Predict for news, CNBC Signals for finance, or BuzzFeed Pulse for pop culture to be a thing in the next few years?

There’s only one way to settle this. With a prediction market lol 🫩

See you next week!