Original|Odaily Planet Daily (@OdailyChina)
Author|Wenser(@wenser 2010 )
Recently, Polymarket completed a $4 billion financing round, with its valuation growing to $15 billion. According to statistics, the nominal trading volume of prediction markets reached $25.7 billion in March 2026, a 10.6% increase from $23.2 billion in February 2026; while in October last year, this figure was only $8.7 billion. As the broader crypto market fluctuates with macroeconomic conditions and regional conflicts, prediction markets have become the most eye-catching sector in the crypto space. With the trading volume of prediction markets still maintaining rapid growth, combined with Odaily's previous article "Why Prediction Markets Are Truly Not Gambling Platforms," it might be time to discuss the unique value of prediction markets to set the record straight.
The Unique Value of Prediction Markets: Entertainment Consumption, Insurance Value, Risk Hedging, Truth Machine
What inspired the author to view prediction markets from the perspective of "non-gambling value" was a post titled "Most People's Misunderstandings About Prediction Markets" published yesterday by Bitwise advisor Jeff Park.
In this lengthy article of several thousand words, Jeff Park pointed out the similarities and differences between prediction markets, stock selection, and poker games, and positively affirmed the entertainment consumption attributes, financial innovation attributes, and precise information attributes of prediction markets.
If the article "Why Prediction Markets Are Truly Not Gambling Platforms" provided a detailed comparative analysis of prediction markets and gambling platforms from the perspectives of price mechanisms, usage differences, user structure, and regulatory logic, then what we aim to clarify today with this article is their diverse value.
Entertainment Consumption Stimulates Economic Development
In "The Theory of the Leisure Class," American economist Thorstein Veblen believed that the essence of the leisure class is not simply enjoying leisure but using freedom from labor and the squandering of wealth as a symbolic system to gain prestige. The so-called alienation of humans by capitalism through money is precisely completed in various types of consumption.
Yet today, the value of consumption is also evident.
In a modern society with a clear division of labor, consumption is a necessary process of value exchange, and entertainment itself is a form of economic consumption and one of the life pursuits that distinguish humans from machines. Taking the sports industry alone, its overall output value is on the scale of $1 trillion; taking the sports brand NIKE as an example, on one hand, they earn profits by controlling the supply chain, manufacturing goods, and completing sales; on the other hand, they are shaping the sports industry in reverse through sponsoring teams, endorsements, sports events, etc. Based on the actual performances of various sports events and athletes in reality, betting in prediction markets is also a form of entertainment that stimulates spiritual consumption, and this in turn affects the attention of prediction market users and the general public to sports events, consumption of sports brands, and expenditure on spiritual recreation.
Limited Insurance Protects Personal Interests
As Jeff Park pointed out in his article "Most People's Misunderstandings About Prediction Markets": "The value of derivatives lies in allowing risk transfer, which means speculators are on the side of insurance institutions (Odaily Planet Daily Note: i.e., the insured transfers uncertain risks to risk-bearing speculators in exchange for certain costs). But the reality is that government intervention distorts the true market price for insurance holders, thus leading to insurance default behaviors. Without government intervention, there is no other way to achieve risk transfer in a transparent and open market."
In this regard, the two major advantages of prediction markets over conventional derivatives become prominent: first, the event precision of prediction markets; second, the limited duration of prediction markets. The former means that a prediction market is a binary, well-defined proposition with no room for ambiguous loss estimation, and the settlement conditions are completely transparent and verifiable; the latter clarifies that the outcome of a prediction market is not an artificially set contract expiration.
Additionally, as SIG founder (Kalshi's official market-making institution) Jeff Yass mentioned in a previous interview, "To some extent, prediction markets play the role of 'new insurance.' In hurricane-prone Florida where there are insurance price caps, users can completely use bets on events like 'Will the wind speed in this area exceed 80 miles per hour?' in the weather market of prediction markets for reverse insurance. This channel also saves the complex processes of claims, operations, and marketing costs in traditional insurance."
In summary, prediction markets can provide participants with cost-clear, fact-following guarantee value for well-defined betting events.
Risk Hedging Responds to Event Crises
Not long ago, Kalshi announced the official launch of a 24/7 commodity market, providing price prediction services for commodities including crude oil, diesel, gold, silver, copper, lithium, natural gas, sugar, soybeans, wheat, corn, coffee, cocoa, live cattle, etc.
Citadel Securities President Jim Esposito also stated at the recent Washington Semafor World Economic Forum that the company might provide liquidity for prediction markets, but compared to sports events, they value the role of prediction markets in geopolitical risk hedging more. Taking the U.S. midterm elections in November this year as an example, he said the event would be "one of the biggest risks facing investors' portfolios," and prediction markets would become a new tool for institutions to hedge risks.
From this perspective, investors can achieve risk hedging by holding "NO" related chips in events on prediction markets, enabling a more flexible response to risks such as commodity price fluctuations and changes in the economic situation. Considering the surge in trading volume in the political situation sector since the U.S.-Iran conflict began on February 28, prediction markets are already acting as risk hedging tools for individuals and institutions.
Truth Revelation Counters Media Bias
In addition to the above values, from the perspective of information pricing, the role of prediction markets in countering the agenda-setting and media bias of mass media cannot be ignored.
American writer and media editor Ashley Rindsberg, in his book "The Gray Lady Winks: How the New York Times's Misreporting, Distortions, and Fabrications Radically Alter History," detailed the negative impact of the New York Times in many historical events, listing numerous institutional failures over the past decades, including the Duranty suppression of the Stalin famine in Cuba, Castro's sudden rise, Iraq's weapons of mass destruction, and the systemic softening of Hitler's rise. In these historical events, the New York Times, due to information channels, ideology, and institutional self-protection purposes, blurred the pursuit of truth about the events, ultimately leading to a series of negative consequences.
Although the judgment rules for many events in prediction markets still highly rely on media, with the development of industry platforms, the acceleration of information transmission, and the expansion of the dissemination breadth of event contracts, prediction markets are expected to become true truth machines to counter a series of biases caused by media due to staff personal preferences, workflows, ideology, and platform interests.
Previously, Crypto.com COO Ericnode stated that prediction markets could become a trillion-dollar market because users have切身利益 (vested interests), and their accuracy rate can be 30% higher than surveys.
In the near future, the roles prediction markets play, the functions they perform, and the value they can achieve are far more than we previously imagined.
Recommended Reading:
Most People's Misunderstandings About Prediction Markets
Why Prediction Markets Are Truly Not Gambling Platforms
SIG Founder Jeff Yass on the Value of Prediction Markets
