Arabic version: السيولة الاحترافية ترفع سقف المنافسة أمام متداولي أسواق التنبؤ
According to Cnbc, prediction-market platforms seeking Wall Street participation could attract deeper professional liquidity, intensify competition and make it harder for many traders to earn money. An academic working paper examining $13.76 billion of Polymarket trades found that about 27% of dollar profits went to 3% of accounts classified as “persistently skilled,” meaning they repeatedly moved prices toward eventual outcomes.
Those accounts generated consistent profits by responding faster to public news, arbitraging inconsistent prices across related contracts and trading against behavioral errors. Yale economist and paper co-author Theis Jensen said greater participation by skilled traders makes prices more correct. Bank of America equity research analyst Julie Hoover said tighter spreads and more efficient markets will make mispricing and arbitrage opportunities harder to find.
Jensen expects the share of traders with an edge to fall from 3% to potentially below 1%, with only the strongest participants, such as hedge funds, able to beat prediction markets. Hoover said smaller skilled traders may still have opportunities in niche markets, where specialized knowledge can matter and traders can become market makers. Jensen also said institutions face scale limits in thin markets because relatively small orders can move prices enough to erase their own advantage.
Participants without a persistent edge may benefit from better-calibrated prices, which can reduce repeated overpayment on the wrong side of pricing errors. Jensen described a more mature market as a “fair gamble”: individual contracts can still produce losses, and frequent traders are still likely to lose after transaction costs, but quoted prices should better reflect risks. For platforms, institutional volume may create more transaction-fee opportunities and improve the appeal of event contracts for hedging, forecasting and market data. Federal Reserve researchers found Kalshi’s headline CPI forecast outperformed the Bloomberg consensus, while its core CPI and unemployment forecasts performed on par with the market-data institution.
