Prediction Markets Are Quietly Turning Into a New Asset Class, Citizens Says

Group 1 - Prediction markets are emerging as a new asset class with monthly volumes around $10 billion, growing rapidly compared to the over $10 trillion in U.S. equities [1] - These markets allow investors to trade directly on events like inflation figures and election results, addressing flaws in traditional finance that rely on proxies [2] - Robinhood's acquisition of MIAX's derivatives exchange is a significant step towards vertical integration and enhancing ties with institutional investors [3] Group 2 - Despite risks such as regulatory uncertainty and thin liquidity, prediction markets are proving to be more responsive than traditional polling methods [4] - Analysts predict that these markets could evolve into a multitrillion-dollar annual market as institutional participation increases [5] - As liquidity improves, institutional investors are expected to engage more with prediction markets for various event-driven strategies [6] Group 3 - Quant firms may utilize prediction markets as high-frequency data feeds to correlate shifting probabilities with price movements across different asset classes [7] - Corporate issuers could monitor these markets to optimize capital raises and assess regulatory change probabilities [7]