Wall Street Is Already Betting on Prediction Markets

"People told us we were crazy," Dixon, Tradeweb's cohead of global markets, tells WIRED. But after the company announced it was partnering with Kalshi in February, Dixon says, the mood changed dramatically. "We've been inundated with calls," he says. "We have never had this kind of feedback from clients on any other announcement.""

"Sophisticated investors are interested in them largely because of markets on topics like election results, the Iran war, and the price of Bitcoin. Many of them see prediction markets as forecasting tools that can be used to inform trading decisions."

"Kalshi, one of the two biggest players in the industry, is eager to forge closer ties with the finance world. The company is already seeing billions of dollars in trading volume generated by institutional investors on markets in its climate/weather and science/tech categories, according to spokesperson Elisabeth Diana."

Prediction markets are experiencing growing acceptance in institutional finance despite initial skepticism. Tradeweb, a major electronic trading platform serving institutional investors, partnered with Kalshi to integrate prediction markets, generating unprecedented client interest. These platforms appeal to professional traders and sophisticated investors who use prediction markets on topics like elections, geopolitical events, and cryptocurrency prices as forecasting tools for trading strategies. Kalshi, a leading prediction market platform, is actively expanding institutional reach through partnerships with financial services firms globally, including Brazilian firm XP International. Institutional investors are already generating billions in trading volume on prediction markets, particularly in climate, weather, science, and technology categories, signaling mainstream adoption beyond public sports betting applications.

Read at WIRED