Through the Commodity Futures Trading Commission (CFTC), a cryptocurrency-based prediction market housed on Coinbase's Base network has submitted an application to become a federally regulated derivatives exchange in the United States.
The US-based company of the blockchain prediction market, Limitless Exchange, is called Limitless Markets US, LLC. Although the platform is already accessible in the US, its application with the CFTC suggests that the Cayman Islands-based company is working to achieve complete compliance.
The notional volume of trading on Limitless has increased dramatically, from $204.9 million in January to $1.66 billion last month. Dune Analytics, a business that examines cryptocurrency behavior on prediction markets, provides the volume statistics.
Market for Short-Term Predictions
The CEO of Limitless Labs, the company that owns Limitless Markets, is CJ Hetherington. Limitless is the "fastest-growing prediction market," according to Hetherington's LinkedIn post. He attributes the expansion to Limitless's provision of short-term contracts and markets that settle more quickly than those of its rivals.
The CEO of Limitless Labs stated that short-term currency contracts are driving Limitless' growth, even though prediction markets' dealings in sports, politics, and cultural events garner the majority of the media attention.
"Limitless is transforming short-term markets, with 15-minute crypto markets and one-hour commodities markets. Short-term financial prediction markets are a much bigger category than most people realize,” Hetherington wrote.
In fact, Limitless is operating even shorter cryptocurrency marketplaces.
Casino.org found trade contracts on whether the price of bitcoin will rise or fall in under five minutes by accessing the prediction market.
The shortest bitcoin price contracts on Kalshi, the biggest prediction market now under CFTC regulation, occur every 15 minutes. Bitcoin, Ethereum, Dogecoin, and other cryptocurrency prices can be traded for five minutes on Polymarket, another cryptocurrency prediction market.
Critics of the Prediction Market
Similar to how a soybean farmer might forecast a bad crop by taking a bet on the commodity's future price, prediction markets claim that their offerings enable investors to use their diverse knowledge to their financial benefit.
Critics claim that short-term trading in commodities and currencies, as well as sports-related goods offered by prediction markets, more closely resemble gambling than investment.
The most successful investor of our time, billionaire Warren Buffett, has compared day trading and short-term speculation, like the five-minute bitcoin price, to wagering on whether the roulette wheel will turn red or black.
"The casino has gotten very attractive to people,” Buffett told CNBC this week. “If you’re buying or selling one-day options, that is not investing. It is not speculating. It is gambling. There’s nobody who can explain why they’re buying an option for one day.”
Prediction markets' detractors also assert that trades pertaining to political and cultural events make the platforms ideal for insider trading.
