New York Stock Exchange President Lynn Martin says prediction markets are becoming inputs into traditional market behavior.
Speaking at the World Liberty forum at Mar-a-Lago, Martin said it became “very clear for us… that prediction markets [were being used] as an input to traditional markets,” referencing a moment during the 2024 US presidential election when S&P futures spiked unexpectedly. According to Martin, that move aligned with crypto platform Polymarket, showing Donald Trump as the likely winner before most mainstream sources.
The implication is significant: institutional traders may now treat prediction markets as a real-time probability feed. It could become a decentralized sentiment indicator that can front-run traditional polling, media projections, or analyst models.
Prediction markets differ from polling because they incorporate financial risk. Prices represent aggregated capital-weighted views rather than survey responses. In fast-moving political or macro events, this structure can produce early probability shifts that influence positioning in equities, futures, FX, and rates markets.
During presidential elections, rate decisions, and geopolitical crises, traders increasingly monitor prediction platforms alongside traditional data terminals. When probabilities shift meaningfully, portfolio hedges and directional trades often follow.
The election example Martin referenced may be the clearest public acknowledgment yet from a major exchange executive that on-chain probabilities are influencing off-chain capital flows.
https://t.co/kT0OAIjgSU— CoinDesk (@CoinDesk) February 18, 2026
Executives are now trading against their own prediction markets
In Q3 2025, Coinbase CEO Brian Armstrong became aware that prediction markets were offering contracts on which buzzwords he would use during the company’s earnings call.
During the call, he openly acknowledged tracking the contracts and then deliberately listed several crypto-related terms. “The conference call was me just having a little bit of fun,” Armstrong later said during an interview at the DealBook Summit.
This demonstrated that mainstream corporate executives are aware of prediction markets pricing their behavior, and may react accordingly.
In traditional finance, earnings calls influence stock prices. Now, prediction markets can influence earnings calls themselves.
That reflexivity creates a new dynamic: corporate communication, political announcements, and public policy signals may increasingly interact with live prediction contracts in real time.
Information leaks and real-world arbitrage
In 2025, online bets on Polymarket increased in favor of Venezuelan opposition leader Maria Corina Machado winning the Nobel Peace Prize shortly before the official announcement. Norwegian officials later investigated suspicious betting activity, with Nobel Institute director Kristian Berg Harpviken telling Bloomberg, “It seems we have been prey to a criminal actor who wants to earn money on our information.”
Machado was subsequently announced as the winner.
Whether the spike suggested a leak or simply informed speculation, the event indicates that prediction markets can act as early detectors of non-public information. In sensitive contexts, those price movements can signal developments before official confirmation.
In traditional markets, insider trading laws govern such activity. In prediction markets, regulatory frameworks are still improving.
BREAKING: Polymarket projects María Corina Machado wins the 2025 Nobel Peace Prize. pic.twitter.com/OFOzhlLgqo— Polymarket (@Polymarket) October 9, 2025
Why this matters
The NYSE president’s comments show that institutional finance is no longer dismissing prediction markets as fringe.
First, prediction markets provide continuous probability pricing. Traditional financial models often rely on binary scenario assumptions. A live probability feed allows more dynamic hedging and risk adjustment.
Second, they capture dispersed information quickly. Traders with localized knowledge, political insiders, industry specialists, or macro analysts can express views directly through capital.
Third, they increasingly overlap with regulated infrastructure. US-based event platforms now operate under Commodity Futures Trading Commission oversight, reducing the perception that prediction markets exist outside formal financial systems.
As these platforms scale, large funds may begin integrating probability feeds into quantitative models the same way they integrate options-implied volatility or credit spreads.
Influence cuts both ways
If prediction markets meaningfully steer traditional markets, and traditional markets influence political or economic decisions, feedback loops could intensify volatility.
For example, if an event contract signals a rising probability of a policy shift, equities may react. That reaction could pressure policymakers, which in turn affects event probabilities.
Markets observing markets is not new. But prediction markets introduce a direct financialized probability layer into that loop.
The question is not whether prediction markets influence traditional finance. According to the head of the NYSE, they already do.
The deeper question is how much influence they will wield as volume grows, and whether regulators, institutions, and traders are prepared for a world where on-chain probabilities shape off-chain capital at scale.
