What it is
Prediction markets allow individuals to bet on future events, ranging from political elections and economic indicators to sports outcomes and technological developments. Participants buy and sell "shares" in a particular outcome; the price of a share reflects the market's perceived probability of that event occurring. If an event has a 70% chance of happening, a share in that outcome might trade at $0.70, paying $1 if the event occurs and $0 if it does not.
These markets often gain attention for their ability to aggregate diverse information and potentially forecast outcomes more accurately than traditional polling or expert opinions. In the news, they are frequently cited during election cycles or for major sporting events, with prices fluctuating as new information emerges. Some crypto-based prediction markets also exist, leveraging blockchain technology for transparency and decentralization. Investors follow them to gauge sentiment on future events that could impact markets.
Why it matters
Prediction markets offer a unique, real-time gauge of collective sentiment on future events, which can influence market outcomes and policy decisions.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice