Prediction markets are platforms where users trade contracts tied to the outcome of future events. Prices on those contracts can reflect what traders believe is likely to happen.
How It Works
A prediction market may let users buy shares in outcomes such as whether a policy decision will happen, whether a team will win, or whether an economic number will hit a target.
If the event resolves in a user’s favor, the contract pays out. If not, it expires with little or no value. Some prediction markets are regulated, while others run through crypto-native or decentralized systems.
Why It Matters In Crypto
Prediction markets matter because they turn information, opinion, and probability into tradable prices. Crypto users often pay attention to them because they overlap with trading culture, market sentiment, and real-world narratives.
A practical example: traders may use a prediction market to estimate the odds of a major regulatory decision before it is officially announced.
