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Prediction Markets Are Not Good Markets (Yet)

Nic Carter·February 21, 2026·Substack
prediction markets attract insiders who prey on retail, just like online poker did

Why It's Worth Reading

Argues that prediction markets face two structural problems preventing them from becoming transformative economic instruments: corporate hedging is impractical due to market fragmentation and basis risk, and insider trading undermines retail participation. Draws parallels to online poker and memecoins to suggest that without structural reforms, prediction markets will remain primarily a sports betting product.

Some technical background helpful

Concepts

Platforms mentioned: Polymarket, Kalshi

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