The leading U.S.-facing prediction markets with 11-figure valuations claim they are the closest thing we have to a crystal ball. Who wouldn’t want a Nostradamus app?
The rapid rise of these platforms comes at a time when people in the U.S. are more anxious about the future than they’ve been in at least a generation, according to a new Gallup poll.
Gallup reported Tuesday: “The percentage of U.S. adults who anticipate high-quality lives in five years declined to 59.2% in 2025, the lowest level since measurement began nearly two decades ago.”
There are many things Americans are stressed and pessimistic about, and prediction markets facilitate betting—which they call trading—on some of them. Examples include the economy, politics, and natural disasters.
Fertile Soil for News Gambling
Doomscrolling on social media set the stage, and the largest prediction markets are leveraging it.
If you’re concerned about your cortisol levels, I don’t recommend the social media feeds of Polymarket or Kalshi. Their doom slop, which is sometimes grossly misleading, apparently works. But I’d say rage gambling is ill-advised.
Their pitch — when questioned in interviews — is that they use the so-called wisdom of the crowd to price the future outcomes of real-world events, benefiting society. The world will collectively benefit from financializing differences of opinion, as Kalshi’s CEO recently described the core vision.
This altruistic narrative is difficult to imagine at closed-door investor meetings. But perhaps billionaire Peter Thiel is a true believer.
Elections remain the classic use case. Prediction markets seem reliable at aggregating polling and obscure election-related news — maybe even incorporating some relevant non-public information. In many other markets, especially those with low liquidity, it’s closer to gamifying the news and charging fees like any run-of-the-mill peer-to-peer gambling platform. Kalshi recently partnered with CNN, and weather betting has been a staple of the collaboration.
Prediction markets seek to be much more than go-to sources during an election cycle. PredictIt, a U.S.-facing prediction market that predates Kalshi and Polymarket, didn’t figure out how to remain relevant outside the run-up to an election.
Right Place, Right Time
There isn’t anything truly innovative about the largest platforms on the market today, aside from their legal loophole to take bets on sports, which has fueled their initial growth. They also greased the right palms—e.g., Donald Trump Jr—and deployed the viral marketing at just the right time.
But a more fundamental reason for investor optimism could be the dread so many ordinary people have about the future. It will take years to build a user base addicted to betting real money on the news, so it’s unsurprising that the largest prediction markets are aggressively targeting teens and young adults.
Unless these platforms offer a prediction-market version of online slots, which is definitely possible, their valuations appear questionable if the vast majority of people are optimistic about the future. Optimism could undermine a desire to use an app to bet on the news.
Some people will always bet on things like pop culture (e.g., the Oscars or Super Bowl halftime shows), regardless of whether the future appears unstable or secure. But these eye-watering valuations require a more profound use case.
The foundation of prediction markets seems tied to growing anxiety about the future. If people become less distressed about what comes next, the fledgling appeal could unravel.
“The world’s gone mad, trade it,” Kalshi said bluntly in one of its advertisements.
