Incentives Enhance Collective Intelligence: Prediction Markets Surpass Expert Performance

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Incentives Enhance Collective Intelligence: Prediction Markets Surpass Expert Performance

Bitget-RWA2025/11/20 00:58

By:Bitget-RWA

- Prediction markets like Polymarket outperform experts by aggregating real-time bets, accurately forecasting events from politics to corporate strategies. - Platforms see $3B+ trading volume in Q3 2025, with bets on Meta's AI plans and Starbucks' acquisitions reflecting decentralized forecasting trends. - Regulatory challenges emerge as CFTC debates oversight of event contracts, complicating legal status under 1936 Commodity Exchange Act. - Industry projects $95.5B market value by 2035, forcing leaders to

The Polymarket Phenomenon: Why Prediction Markets Are Surpassing Traditional Experts

Prediction markets are now outperforming conventional experts in predicting everything from election outcomes to company earnings, as platforms such as Polymarket and Kalshi become more popular. By allowing participants to place real-money bets, these markets pool scattered information, generating a "truth signal" that frequently updates more quickly than polls, analysts, or official announcements. For example,

Polymarket accurately forecasted the winner of New York City's mayoral election

several weeks before news organizations recognized the trend, highlighting how decentralized wagering can outpace institutional analysis.

This trend is moving beyond politics. In the business world, prediction markets are now used to bet on product releases, workforce reductions, and executive changes.

One recent case involved predictions

about Meta’s AI initiatives and Starbucks’ possible acquisition plans, with market participants adjusting odds in real time. This reflects a larger pattern:

trading activity on leading platforms topped $3 billion

during the third quarter of 2025, a fivefold jump from the previous year’s figures. Kalshi and similar platforms,

which collaborates with Coinbase

to provide event-based contracts, are helping to bring this trend into the mainstream.

However, regulatory attention is intensifying. The Commodity Futures Trading Commission (CFTC) is under pressure to clarify its regulatory stance on prediction markets, especially as they begin to overlap with areas traditionally governed by sports betting and financial derivatives. Michael Selig, nominated to lead the CFTC, will have to address these concerns during his confirmation,

as lawmakers discuss whether event contracts

— such as those related to government shutdowns or celebrity retirements — should be classified as "gaming" under the 1936 Commodity Exchange Act.

The expansion of prediction markets is also putting pressure on established institutions.

Polling reliability has diminished

, with just 22% of Americans expressing trust that the federal government acts in their best interests. In contrast, prediction markets demand accountability: each wager links conviction to financial risk, encouraging accuracy instead of mere speculation. This approach has been likened to research from the Iowa Electronic Markets,

which finds that prediction markets frequently outperform

expert predictions by synthesizing unbiased, up-to-the-minute data.

Incentives Enhance Collective Intelligence: Prediction Markets Surpass Expert Performance image 0

Leaders in various industries are now contending with these changes. Executives and board members are tracking probability shifts that occur hours before official reports are released, prompting a reassessment of how decisions are made. For instance,

the odds of Amazon announcing another major layoff

or Taylor Swift canceling a tour are set by markets ahead of analyst commentary. This environment brings both uncertainty and new possibilities, as organizations adjust to a world where immediate market signals can outpace conventional strategies.

As prediction markets expand, their impact grows as well.

The industry is expected to reach a value of $95.5 billion

by 2035, fueled by its uses in economics, culture, and international affairs. Platforms like Polymarket and Kalshi are evolving into sophisticated forecasting tools, challenging the speed and scope of traditional systems. For decision-makers, the key is

to interpret these signals ahead of confirmation

— all while navigating regulations that are still catching up to technological progress.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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