Prediction markets are increasingly outperforming traditional opinion polls as a predictive tool, and one reason for this comes down to economic conviction. When people put real money into their predictions, they don’t lie.
The rise of platforms like Polymarket and Kalshi are challenging the dominance of traditional predictions. Polling organizations have long been key voices in predicting political and economic outcomes. But a series of high-profile poll failures, from the 2016 US election to Brexit, opened the door for challengers to punish uncertainty with cash.
Why money creates better data
The central argument in prediction markets is behavior. There are well-documented problems with exit polls and opinion polls. Respondents often give answers that they think are reasonable, or that reflect who they want to win, rather than who they think will win. There is no cost even if there are mistakes in the survey form.
Prediction markets completely close that gap. Any probability reflected in a market price represents someone willing to risk real capital for that outcome.
“Making predictions and bets requires belief,” George Tung, founder of ClashPicks and host of the widely followed CryptosRUs channel, told BeInCrypto. “You have to be pretty confident that something is going to happen before you actually put your money down.”
This belief fundamentally makes a difference in the quality of data produced by prediction markets. It’s not about emotion, it’s about skin in the game.
The numbers bear this out. Independent research by data scientist Alex McCullough published through the Dune dashboard found that Polymarket predicts outcomes with approximately 86% accuracy a month in advance of event resolution, rising to approximately 91% in the final four hours. In this study, we analyzed historical data from Polymarket, excluding markets with extreme probabilities to avoid skewing the results.
Polling issues
Traditional opinion polls are struggling. Despite methodological overhauls since 2016 and 2020, polls still overestimated Kamala Harris’ chances in the 2024 US election and underestimated Donald Trump’s chances, especially in swing states.
Prediction markets, on the other hand, told a different story well before election night. Tung emphasizes that this edge is skill-based, not random.
“When you predict an outcome like a presidential election or whether gold is going to go up this week, it’s based on skill,” he told BeInCrypto. “There are people who do a huge amount of research and study things.”
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The reason for the construction is speed. Polls take several days to be fielded, weighted, and published. Well-resourced prediction markets reprice in minutes when new information is released.
Not without flaws
However, prediction markets are not perfect. Critics point to significant structural weaknesses. When participants are concentrated in a small, homogeneous group of traders, markets can be driven by a single large actor, producing prices that reflect individual beliefs rather than true collective intelligence.
Demographic disparities are also real. Prediction market participants are heavily skewed towards crypto-native and financially sophisticated users and are not representative of the general public. Critics argue that such a narrow crowd limits how far the “wisdom of the crowd” argument can actually reach.
Mr Tan directly acknowledged the tension.
“I agree that the bigger the platform and the more people using it, the more accurate it will be,” he says. But he pushed back on the idea that demographic reach is a particular weakness of prediction markets. “What other form of data is predicted by more people than the prediction marketplaces combined? What data actually has more demographics than this?”
This is quite a challenge, and the polling industry has yet to come up with a satisfactory answer.
New platforms entering the space are betting that widening participation is key. ClashPicks, Tung’s proprietary prediction market built on Solana, offers free prediction models designed to lower the barrier for first-time users, with the express goal of engaging participants who would never open a Polymarket account.
what happens next
It doesn’t matter whether prediction markets completely replace public opinion polls. They’ve already changed the conversation. Institutional investors, campaign strategists, and news organizations are now incorporating predictive market data alongside, and in some cases, instead of traditional polling aggregations.
The scale of institutional investor interest cannot be ignored. In October 2025, Intercontinental Exchange (ICE) invested $2 billion in Polymarket, valuing the company at $9 billion. It is not a bet on niche cryptocurrency experiments. This shows that the mainstream financial industry is taking prediction markets seriously as a data infrastructure role.
The next test will be whether the industry can expand its participant base without losing the quality of the skin in the game that makes the data valuable in the first place. More participants means more diverse information, but only if participants are truly informed and not just guesses. That balance is still being adjusted.
For now, prediction markets are the most honest mirror of what people believe will actually happen. This is because incorrect predictions will result in some loss.
