"Prediction markets show limits in 'Iran-related betting'…still not enough to draw institutional participation"

A large amount of money flowed into related bets on decentralized prediction markets over the war between the United States and Israel and Iran that began on the 28th. However, an analysis found that liquidity and scale are still insufficient for institutional investors to participate.

On the 6th (Korea time), Bloomberg reported, citing an analysis of Polymarket data, that 90% of investors betting on the possibility of Khamenei being ousted were retail investors making small bets of $1,000 or less. The bet drew market attention, with more than $100 million traded in the week before reports emerged of U.S. and Israeli attacks on Iran.

Ten large wallets that traded more than $1 million were found to have entered the bet late, after the news reports, when the odds of Khamenei being ousted were above 90%. Their average profit amounted to just $11,223 per wallet.

Wall Street experts assessed this as evidence that institutional participation remains difficult.

Allen Rosin, Oppenheimer's head of institutional equity derivatives, said, "Prediction markets still have low liquidity by institutional standards," adding, "The trading size is too small to build a real investment position."

Ian Dunning, head of AI at Hudson River Trading, said, "It’s true that prediction markets have grown rapidly over the past six months," but added, "For now, moves in the futures market on Sunday night provide far more information than weekend trading in prediction markets."