Wall Street enters the prediction market, ending the era of retail frenzy Finally, it has arrived. The prediction market, once built by political supporters, speculative retail investors, and the wool party, is now welcoming a group of silent and deadly new players. According to the Financial Times on Thursday, several well-known trading firms, including DRW, Susquehanna, and Tyr Capital, are forming dedicated predictive market trading teams. DRW released a job advertisement last week, offering traders who can "monitor and trade active markets in real-time" on platforms such as Polymarket and Kalshi a base annual salary of up to $200000. Susquehanna, an options trading giant, is recruiting predictive market traders with the ability to "detect incorrect fair values," identify "abnormal behavior" and "inefficiencies" in the predictive market, and is also building a dedicated sports trading team. Cryptocurrency hedge fund Tyr Capital continues to recruit predictive market traders who are already running complex strategies. The data supports this expansion ambition. The monthly trading volume surged from less than $100 million at the beginning of 2024 to over $8 billion in December 2025, with a record breaking daily trading volume of $701.7 million on January 12th. When the pool of funds is deep enough to support the size of giants, the entry of Wall Street becomes inevitable. ‍ Arbitrage priority In predicting the market, institutions and individual investors are not playing the same game at all. Retail investors often rely on various fragmented information to predict individual events, which is essentially a form of gambling, while institutional players focus on cross platform arbitrage and market structural opportunities. In October 2025, Boaz Weinstein, founder of hedge fund Saba Capital Management, stated in a closed door meeting that predicting the market can allow portfolio managers to hedge investments with higher accuracy, especially regarding the probability of specific events occurring. He stood next to Shayne Coplan, CEO of Polymarket, and said, 'A few months ago, Polymarket showed a 50% probability of economic recession, while the credit market showed a risk of about 2%.'. You can come up with countless pairing transactions that were previously impossible to achieve. ” According to Weinstein's view, hedge fund managers can buy contracts on Polymarket that say "the economy will not decline" because the market believes that the probability of a recession is as high as 50%, so this contract is relatively cheap. At the same time, in the credit market, it is possible to short some bonds or credit products that will plummet during an economic recession, as the credit market only gives a 2% probability of a recession, so the prices of these products are still high. If the economy really declines, Polymarket may lose a small amount of money, but the credit market can make a big profit because overvalued bonds will plummet. If the economy had not declined, you would have made money in the Polymarket and suffered minor losses in the credit market, but overall you would still be profitable. The emergence of predictive markets has given traditional financial markets a brand new 'price discovery tool'. ⚖️ The privileged class is coming What tilts the balance even more is the privilege at the level of rules. Susquehanna was Kalshi's first market maker and reached a tournament contract agreement with Robinhood. Kalshi offers many discounts to market makers, including lower transaction fees, special trading limits, and more convenient trading channels. The specific terms have not been made public. The entry of market makers will quickly change this market. Previously, the market was often plagued by liquidity issues, especially for niche events. When you want to buy or sell a large number of contracts, you may face significant price differences or be unable to find counterparties at all. Professional institutions will quickly eliminate obvious pricing errors. For example, the price difference of the same event on different platforms, or obviously unreasonable probability pricing, will be quickly smoothed out. This is not good news for individual investors. Previously, you may have noticed that the probability of "Trump winning the election" in Polymarket was 60%, while in Kalshi it was 55%, making it easy to arbitrage. However, in the future, such opportunities are unlikely to exist. With the PhD on Wall Street earning hundreds of thousands of dollars annually, future forecasting contracts may also enter an era of specialization and diversification, rather than just single event forecasting, such as: 1. Multi event combination contract, similar to the cross level of sports betting 2. Time series contracts predict the probability of an event occurring within a specific time period 3. What is the probability of A occurring and B occurring for a conditional probability product …… Looking back at the history of finance, it can be found that the development of every emerging market, from foreign exchange to futures, and then to cryptocurrency, has followed a similar trajectory: it was ignited by individual investors and eventually taken over by institutions. The prediction market is repeating this process. Technological advantages, capital scale, and privileged access will ultimately determine who can stay in this probability game until the end. For individual investors, although there may still be a glimmer of hope in long-term forecasting or niche fields, it is necessary to recognize the reality that when the precision machines of Wall Street begin to operate at full speed, the carnival period where profits can be easily made through information asymmetry may be gone forever.