Prediction Markets are Transforming into a New Asset Class

Prediction Markets are Evolving

Citizens bank reports that prediction markets are transitioning from a niche asset class to an emerging asset class. The bank claims that event contracts address a significant gap in traditional finance. These structures provide investors with the opportunity to trade directly on inflation, elections, Federal Reserve actions, and regulations.

Regulation and liquidity are among the challenges faced. However, prediction markets have the potential to evolve from retail-focused speculation to a mainstream hedging and information tool. Citizens forecasts that this evolution could reach an annual scale of several trillion dollars.