Top 3 Reasons Why Investors Are Bullish on Prediction Markets1. Uncertainty is at all-time highsWith the global pandemic wreaking havoc in nearly every corner of the world, uncertainty and insecurity have never been higher. Being able to hedge against an increasingly unstable future has never been more important. Whether you are a commodities trader or a futures trader, prediction markets give you the opportunity to hedge your existing positions in the market to reduce your overall exposure to risk.
2. The rise of DeFi for Finding Yield OpportunitiesNowadays, commercial banks are offering less than 0.25% in yearly interest rates on deposits in savings accounts to their customers. That’s not enough to outpace inflation, and that’s certainly not enough to provide any sort of yield when the US Government & Federal Reserve decide to print another $1.9 Trillion dollars out of thin air.
3. Everyone wants to know and influence the futurePeople have always placed a premium on privileged information. Of course no one can truly see the future exactly as it will unfold. But with highly refined and ordered information, we can make a pretty accurate prediction. Capital markets are largely based on trading informational advantages. Prediction markets bring that idea to the next level by making the prediction itself the market. Prediction markets have proven to be so powerful that some even question whether or not they just predict the future, but also have influence over the outcome of future events.
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