Wall Street uses prediction markets to measure risk and guide investment decisions
Updated
Updated · MarketWatch · May 1
Wall Street uses prediction markets to measure risk and guide investment decisions
8 articles · Updated · MarketWatch · May 1
Combined monthly volume on Kalshi and Polymarket rose from about $5 billion in November 2024 to $24 billion in March 2026, drawing attention from Barclays and Carson Group.
Barclays said the most liquid contracts, especially on Federal Reserve decisions, can offer a cleaner read on event risk than traditional assets, while slower trading patterns let investors position earlier.
Analysts said prediction markets help interpret catalysts from rate decisions to geopolitical shocks, though they can misprice outcomes; sports still made up about 75% of Kalshi's April volume.
With prediction markets booming and legal battles heating up, could their mainstream adoption reshape how Wall Street manages risk—or trigger new financial crises?
As insider trading scandals hit prediction markets, what safeguards can truly prevent manipulation when real-world events become tradable assets?