January 29, 2026— Wall Street is getting on the bandwagon for prediction markets, which it views as both a potential source of valuable data and a new vehicle for taking and hedging investment positions.

Using prediction markets, users can trade contracts on the outcomes of specific, real-world future events such as Fed decisions, CPI rates, employment figures, gas prices, GDP growth, and even the purchase of autonomous territories in the North Atlantic. Platforms like Kalshi and Polymarket kicked off the world’s current obsession with these markets. Now, exchange heavyweights CME, Cboe and Intercontinental Exchange (ICE)—an investor in Polymarket—are getting involved, and brokerage firms like Interactive Brokers and Robinhood are helping drive the nascent industry forward.

“It’s easy to understand why exchanges, brokers and investors are intrigued,” says Jesse Forster, Head of Equity Market Structure Research at Crisil Coalition Greenwich and author of Prediction markets: It’s all about the data. “By tapping into the ‘wisdom of the crowd,’ prediction markets promise unique signals about the future.”

A Promising New Tool 
To gauge sentiment on the Street, Crisil Coalition Greenwich conducted a study with U.S.-based market structure specialists (including buy- and sell-side traders, market structure analysts, business heads, market data experts, fintech providers and other well-informed professionals) on the potential impact and value of prediction markets for institutional trading.

A plurality of respondents, 43%, expressed a positive view, citing the innovative nature of these platforms and the value they could add to the marketplace. 
“Advocates see prediction markets not just as a new trading platform, but as a promising new tool for information aggregation and forecasting, capable of providing unique, alpha-generating insights,” says Jesse Forster.

That bullish view is not universal. A sizable minority, nearly one in five, have a negative perspective, fearing that prediction markets could encourage gambling while introducing noise and risk into financial markets, rather than actionable signals.

Speculation, Hedging and Data
The industry experts participating in the study believe the first application of prediction markets in institutional investing will take the form of new speculation vehicles that allow investors to take positions on market, macro and political events. Study participants also see the potential for prediction markets as a hedging tool capable of providing both a new source of market data for hedging and new approaches for hedging positions directly.

Roughly 60% of market structure experts also see prediction markets as a source of potentially valuable data. The outputs of prediction markets, including prices, odds, volume, positioning, and changes around events, could become a supplementary dataset for institutional investors. About 17% of respondents believe this data could include unique, hard-to-find insights capable of driving alpha.

Although study participants believe data from prediction markets will be serving a valuable role within the next one to two years, liquidity will be the key determinant. 
“Without depth and participation, markets may not clear efficiently enough to produce reliable signals,” says Jesse Forster. “To win institutional trust, prediction markets must demonstrate repeatable, actionable forecasting value rather than entertainment-driven volatility.”

Prediction markets: It’s all about the data, presents the full results of the January 2026 study on the potential impact and value of prediction markets for institutional trading. The report traces the early evolution of prediction markets, assesses how market structure experts perceive these new markets, identifies what respondents see as the most likely use cases for prediction markets among institutional investors, and examines opinions about the potential value of the data generated by prediction markets.