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Critical Mass in Prediction Markets
The landscape of consulting regarding political and financial risk is shifting, with increasing interest from financial firms in utilizing prediction markets for pricing risks. A significant threshold of liquidity and volume is necessary for these markets to provide efficient pricing, suggesting we may now be reaching that critical mass. However, concerns exist about the utility of long-term predictions, such as geopolitical events, as they might not offer actionable insights compared to more immediate markets, like sports betting, where futures can still yield profitable opportunities.