Trading on Tomorrow: How Prediction Markets are Reshaping the Everyday Investor

Prediction markets, (markets that trade on likely future events), have shifted from a niche project to a growing part of everyday investing. These markets offer investors a way to bet on whether real-world events will happen, instead of traditionally buying stocks or bonds. For many people, it is a new way to speculate, hedge everyday risks, and learn about what’s likely to happen. However, it also comes with heightened volatility, regulatory uncertainty, and complex risk.

Who uses prediction markets today?

Recent industry estimates suggest that active participants on major prediction platforms such as Polymarket and Kalshi have climbed from just a few thousand users in early 2024 to hundreds of thousands by late 2025. These users are generally younger, tech savvy, and often overlap with crypto traders and online retail investors who are comfortable with app based finance and fast trades.

For many, prediction markets serve as both an investment tool and a form of information consumption. On these sites, people can monitor prices on elections, economic data releases, and technology trends as “live probabilities,” treating the market as a real time forecast alongside polls and analyst reports. This transforms retail investors from passive news readers into active participants who can trade directly on their views about inflation, interest rates, or political outcomes.

How have the markets evolved?

In 2020, prediction markets were largely confined to a handful of platforms with modest liquidity, often operating in gray regulatory zones and focused on politics and crypto related topics. Since then, trading volumes have expanded dramatically. In a recent Forbes article, a comprehensive report from Keyrock and Dune stated that total 2025 global prediction market volume was around $44 billion , mostly split between Polymarket and Kalshi. To compare, in 2020, the peak monthly volume was under $100 million.

The mix of markets has also diversified. While politics remains a major category, non sports “event finance” such as macroeconomic indicators, technology adoption, and corporate outcomes has grown more than 10 fold in 2025 alone. At the same time, the platform has become much more professional. In the U.S., for example, regulated “event contracts” are starting to show up directly inside mainstream brokerage and trading apps, putting these markets in front of everyday investors rather than just specialists.

What are the effects on the average user?

For everyday investors, prediction markets offer some tangible benefits. First, they allow individuals to take small, targeted positions on macroeconomic events. Second, empirical studies and platform data show that well traded markets can be relatively accurate, which gives people a potentially valuable information hub.

However, there are clear risks. Prices can become more volatile near elections or big data releases, as these events can represent highly volatile events. Retail investors can also suffer rapid losses if they misinterpret probabilities or over leverage their positions. Regulatory uncertainty adds another layer of risk, as changes in policy or enforcement can abruptly restrict certain contracts or platforms, affecting liquidity and access for the average investor.

What 2026 may bring?

Looking ahead to 2026, many observers think prediction markets will keep getting bigger and could even pass $100 billion in annual trading if more big investors join and apps become easier to use. These markets are also expected to show up in more familiar places, like regular investing and finance apps, so people can take part more easily.

The products should also become easier to understand. Common themes like inflation, interest rates, or specific industry trends may be offered in more standard, easy to-understand formats, so individuals and small businesses can use them to protect themselves against everyday financial ups and downs.

Rules are likely to tighten as well. Regulators are already paying more attention to issues like insider trading, scams, and overall risk, which will affect how widely these markets are opened to everyday investors.

All of this is pushing prediction markets toward a broader role in everyday finance: part investing, part forecasting, part information source. For most people, the key will be understanding the risk, what each contract actually means, how the platform is regulated, and how much money they can afford to risk before they dive in.

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