Prediction Markets Are Transforming into a New Asset Class

Prediction Markets are Evolving

Citizens Bank has reported that prediction markets are transitioning from a niche asset class to an emerging asset class. The bank argues that event contracts address a significant gap in traditional finance. These structures allow investors 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 transform from retail-heavy speculation to a mainstream hedging and information tool. Citizens forecasts that this evolution could reach a scale of several trillion dollars annually.