Citizens: Prediction Markets Are Quietly Turning Into a New Asset Classs

The bank said event markets are still tiny versus stocks but are rapidly expanding beyond sports into macro and policy risk. What to know : Citizens said prediction markets are shifting asset class from niche to emerging. The bank argued that event contracts fix a key flaw in traditional finance by letting investors trade directly on inflation, elections, Fed moves and regulation. While regulation and liquidity are hurdles, prediction markets are likely to evolve from retail-heavy speculation into a mainstream hedging and information tool that could reach multitrillion-dollar annual scale, the report said.