For a long time in the past, we have understood prediction markets as a very 'rational' thing: people bet on the future based on public information, and market prices reflect consensus. But over the past year, we have become increasingly aware of one thing: many prediction markets are not 'predicting the future', but are prematurely exposing those 'results that have already been known by a few'.
When an outcome is already determined but not yet been made public, prediction markets become an extremely brutal thing: they don't require leaks, anonymous letters, or even a single word. The direction of funds itself is the leak.
Prediction markets are changing the way 'secrets' exist:
Imagine a few scenarios:
· A popular TV series has finished filming; will the main character die?
· The selection process for a gaming award has basically ended, but the results haven't been announced yet
· An AI company is about to release key product or merger news
· The regulatory outcome, exchange listing time, or governance vote direction of a certain Crypto protocol
In the traditional world, these are all called 'insider information'. But after the emergence of prediction markets, they face a new problem: as long as someone knows and can bet, the secret is hard not to be captured by the market. You don't need to know 'who said what', you just need to look at:
· Which options are being heavily weighted
· Which addresses are continuously betting during key time periods
· Which accounts repeatedly 'bet correctly in advance' in similar events
This is not a conspiracy theory; it is the natural result of probability and incentives.
From 'Content Coverage' to 'Result Stress Testing'
This is also why we began to reflect on the traditional news model. The past content logic was: event occurs → a few people know → report (publish) → the public knows
What prediction markets bring is another path: event occurs → someone knows → someone places a bet → price begins to deviate → the world already 'knows in advance'
There is even an more extreme path: event occurs → someone knows → someone places a bet → price begins to deviate → causes the event to change
Regarding this path, I can give a classic example. At the end of the Q3 2025 earnings call for Coinbase (Nasdaq code: COIN), CEO Brian Armstrong said something that seemed casual:
These words were not random; they were the content people bet on in the prediction market's 'whether certain words would appear' market surrounding this earnings call. After Armstrong said these words, the relevant prediction market settled immediately, and those bettors who correctly predicted the related words being spoken made a profit. It was reported that roughly over $80,000 in betting volume on these markets was settled instantly on platforms like Kalshi and Polymarket.
That is to say, without these bets, in another parallel universe, Brian Armstrong would have just normally finished the earnings call process without deliberately saying these words. This is the 'reality distortion field' of prediction markets; the act of betting itself has the power to change reality. This is common in sports betting, where outcomes are often manipulated by insiders to favor the least bet option. However, whether it's the words at the Coinbase earnings call or a football match, they don't have a major impact on our lives. But as Polymarket and Kalshi grow, the topics on them will get closer and closer to our lives, and this 'reality distortion field' of prediction markets will also truly affect our lives.
