If I could marry an asset class, I’d already be picking out china patterns with prediction markets.

They’re not just the asset class of the century—they’re the one all the others will stalk on Instagram. 

Prediction markets are inevitable for the same reason language, trade, and money were inevitable…

They’re the most efficient technology we’ve ever found for turning scattered human knowledge into a single, actionable signal.

Humans are tribal, biased, and noisy.

Markets are agnostic.

They don’t care if you’re a PhD or a conspiracy theorist in your basement—only if you’re right.

Vlad Tenev, Robinhood’s CEO, gets it.

On CNBC, he didn’t hedge. He said, “Prediction markets are the future.”

Not just for traders, but for how we consume news itself.

Thomas Peterffy—the billionaire who made electronic trading mainstream before anyone believed in it—sees it coming too.

In a MarketWatch interview, Peterffy said prediction markets could surpass the equities market within the next 15 years.

But how would this happen? And what would it look like? And what’s the single-best way to invest?

Let’s dive deep.

Before the Trade Comes Truth

To be sure, prediction markets won’t replace the stock market’s role as capital allocator…

But they could flip its role as the primary reference point for “what the market thinks will happen.”

In that scenario, the stock market becomes a downstream effect—more like a portfolio construction tool—while prediction markets become the upstream truth engine.

Consider all of the micro-events that happen every day with macro events. The stock market can’t cleanly price “Will Apple’s iPhone 17 camera get the top DxOMark rating?”

But if that question has a real impact on Apple sales, a prediction market can host it—and traders can use that signal to trade AAPL.

You end up with thousands of small markets feeding into broader capital markets.

That’s why prediction markets could become the Bloomberg Terminal for everything—politics, sports, science, tech…

In the short term, many will dismiss it as gambling.

But they said the same thing about the stock market 150 years ago.

The future always starts looking like a game before it becomes the infrastructure we can’t live without.

Betting on Barbenheimer

Consider just how wide the surface area really is.

The stock market is mostly constrained to listed companies and the events that move them.

Prediction markets can cover anything with an uncertain outcome.

Most don’t wake up thinking, “I wonder what GE’s dividend yield is today.” They wake up thinking about the headlines, the memes, the scandals, the big cultural moments they’re already emotionally invested in.

Owning a share of Apple doesn’t feel as visceral as taking a position on whether the next Marvel movie will flop harder than The Marvels.

Prediction markets take what’s already occupying mental bandwidth and make it tradable.

But, again, culture isn’t fluff…

It’s a leading indicator.

Consider the Barbenheimer phenomenon in the summer of 2023.

You could have had markets like:

“Will Barbie gross over $1B by September 1?”

“Will Oppenheimer win more Oscars than Barbie?”

“Will Barbie open higher than $160M domestic?”

“Will both films maintain a Rotten Tomatoes score over 85% after two weeks?”

These events have a real impact on the stock price of Mattel, who owns Barbie IP… or Universal, which distributed Oppenheimer, and even IMAX, whose premium ticket sales tend to spike with Nolan films.

Robin Hanson, the godfather of this idea, points out that markets like these have been tested against polls and committees—a thousand times in some cases.

They’re more accurate about three-quarters of the time. And this is with traders who often aren’t even representative of the public.

In large-scale replication forecasting, prediction markets nailed replicability in social science studies with 73% accuracy—outperforming surveys and expert opinions alike.

Again, the market doesn’t care about your credentials.

It doesn’t care if you have a Doctorate or if you’re some guy in his pajamas who’s been up all night reading obscure PDFs. If you have better information and you act on it, the price moves toward the truth.

And unlike committees—where one loud idiot can ruin the room—markets don’t break if they have idiots. Idiots lose money. People with good information make it.

The signal survives.

The Biggest Winners

The future “flip” comes when information liquidity outpaces capital liquidity.

Traditional stock markets are capital-heavy but information-light, bound by the slow drip of earnings reports, IPOs, and regulatory filings.

In contrast, prediction markets will be able to spin up instantly for any event, anywhere.

(Of course, there’s potential for dark consequences—assassination markets, disaster bets—but in reality, legality kills liquidity, and the cost of causing the event is almost always higher than the payout.)

Once adopted at scale, they’ll become ubiquitous, embedded in search results, social media feeds, and enterprise dashboards.

“What’s the probability this supply chain recovers by Q3?” will be as common as checking the weather.

Corporations, governments, and institutions will fold these live, crowd-sourced odds directly into their planning and risk models.

At that point, the boundary between “prediction market” and “market” dissolves…

And the stock market becomes one part of a big tree: the global real-time forecasting market.

Who stands to win no matter what in this shift?

We’ve identified one crypto ahead of the pack that already serves as the de facto infrastructure for 90% of the industry now…

And nobody sees (yet) just how crucial they’ll be for the future of prediction.

Early Stage Crypto Investor members will get the full scoop in this Friday's weekly update.