|—|—|

| Election outcomes | 6-8 weeks vs polls | 74% outperformance (Berg et al.) |

| Regulatory decisions | about 7 days vs media | Strong directional track record |

| FOMC rate decisions | 48-72h vs FedWatch | Directionally correct in observed cycles |

A framework: signal, not replacement

The objection that prediction markets are “gambling” conflates venue with mechanism. A contract paying out on whether the Fed cuts rates in June is structurally identical to a binary option on the same event. One is CFTC-regulated and called a “derivative.” The other is called a “bet.” The underlying information aggregation is the same.

The honest critique is that prediction markets have thin data on tail events, are vulnerable to manipulation by well-capitalized actors, and carry platform risk. These are reasons to use them as a complement, not a replacement.

The framework I use at Duelling Hares:

  1. Directional filter. If Polymarket shows more than 65% probability on a binary event that consensus pegs at 50%, investigate before dismissing.
  2. Velocity measure. Rate of probability change per 24-hour window proxies for information arrival velocity. Compare to equivalent movements in traditional markets.
  3. Volume-weighted credibility. Markets below $1M in open interest get discounted. Markets above $10M get weighted at parity with traditional indicators.
  4. Cross-market confirmation. A Polymarket signal corroborated by Kalshi, PredictIt, or a derivatives market (options skew, fed funds futures) becomes a conviction signal.

Prediction markets are not about to replace Bloomberg terminals. But a Bloomberg terminal that excludes them is incomplete.

The marginal dollar setting the price on Polymarket is the same kind of dollar that sets the price on the CME. Samuelson’s dictum, that markets are micro-efficient at the macro level, applies here as anywhere. The only difference is that the institutional world has not yet built the pipes to route this signal into its models.

That will change. The only open question is whether you wait for consensus or start reading the signal today.

Alex Voss is Chief Financial Analyst at Duelling Hares. The views expressed are his own and do not constitute investment advice. Past performance of prediction markets is not indicative of future results.