Prediction Markets Emerge as a New Asset Class Amid Regulatory and Manipulation Risks

Prediction markets are gaining traction not just as forecasting tools but as a novel asset class within the cryptocurrency ecosystem. Platforms and venture funds are increasingly betting on the commoditization of information and probabilities, sparking what industry observers call a "prediction market war." This competition is fueled by significant fundraising, backing from top-tier venture capital firms, and the exploration of new use cases.

The shift from traditional news consumption to odds-based valuation reflects a broader transformation in how market participants derive value. Investors now view prediction markets as strategic assets rather than mere entertainment or research tools. However, this rapid innovation introduces systemic risks, including regulatory scrutiny, market manipulation, and herd behavior, which could undermine sustainability.

Proponents argue that prediction markets represent the next major wave in the current cycle, with future users likely to prioritize odds over headlines. The theoretical promise of these markets lies in their ability to aggregate collective intelligence, but practical challenges remain.