Tech-focused asset manager ARK Invest said it will begin using prediction market data from Kalshi to enhance its investment decision-making, illustrating prediction markets’ growing utility beyond trading.
According to a Kalshi statement, ARK will use prediction market prices to gauge real-time expectations and complement its market-based research, while also monitoring indicators such as trading volume, regulatory approvals and technological milestones. The firm will apply the data to risk management and hedging strategies as well.
“Bringing prediction markets into institutional workflows is a natural next step for innovation in financial research,” ARK Invest founder and CEO Cathie Wood said, and ARK research director Nick Grous added that prediction markets “offer some of the purest expressions of risk around key economic and company-specific outcomes.”
Prediction markets emerged as a prominent crypto use case last year and have regularly surpassed $10 billion in monthly trading volume. Institutional interest has grown too: researchers at the U.S. Federal Reserve and academics at Cornell have highlighted prediction market data as valuable for decisions that require a timely read on market expectations.
In a post on X, Wood said ARK has been working with Kalshi to list markets on topics the firm follows, including macroeconomic data and scientific milestones. Kalshi CEO Tarek Mansour noted several such markets are already live, including nonfarm payrolls, deficit-to-GDP ratio markets and business KPIs.
Fed, Cornell eye opportunity in prediction markets
Last month, Federal Reserve researchers argued Kalshi can better capture macroeconomic expectations in real time than some existing tools and recommended incorporating its data into the Fed’s policy processes. The researchers said Kalshi markets “provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers.”
Academic research has also used prediction market data: Cornell researchers studied trader reactions to political events on Polymarket, including presidential debates and the 2024 assassination attempt on Donald Trump, to analyze real-time market responses.
Cointelegraph is committed to independent, transparent journalism. This article follows Cointelegraph’s Editorial Policy and aims to provide accurate, timely information. Readers are encouraged to verify information independently. Read the Editorial Policy at https://cointelegraph.com/editorial-policy