Author: Ma Tou, Da Da Luo Si
Prediction markets may be the only field in 2025 capable of simultaneously exciting elite dollar fund investors, crypto natives, and media professionals.
There are actually many compelling reasons to be bullish on it, such as arbitrage between state and federal regulations on U.S.-based betting, the massive fees generated by extreme extrapolation of 0DTE options, and the convergence of the content industry with light betting.
But today, let’s set those aside and explore the spirit behind prediction markets—and how that spirit aligns with a16z, which champions “New Media,” making it one of the most crucial pieces in its new media empire.
The Spiritual Chronicle of Prediction Markets
The product of prediction markets is simple (at least on the surface): it turns the subject of a binary option into any event or piece of information, but its underlying spirit has evolved through several phases.
The earliest discussions about prediction markets originated with Hayek, who believed that knowledge is unevenly distributed, and that the market, as a coordinating mechanism, mobilizes information from all corners of society—from vendors to experts—so that different individuals’ judgments about the future converge into a single price on the order book.
This is one of the oldest discussions, yet also one of the most frequently cited today: when you see terms like “probability aggregation market” or “truth machine” on marketing accounts, they originate from nearly a century agoHayek’s “The Use of Knowledge in Society.”
After Hayek, the torch was picked up by Robin Hanson, who is still actively engaging on Twitter, battling with crypto enthusiasts. His key contribution was designing a mechanism called the Logarithmic Market Scoring Rule (LMSR), which incentivizes those who know the truth to speak it—this design essentially established the current paradigm for prediction markets.
With such an incentive mechanism in place, information holders everywhere are motivated to contribute their knowledge and participate in the market. Extending this further, such a market could also be applied to public governance—creating a market for every future issue, where people vote with real money, and the future landscape emerges from the changing odds on the order book. This utopia is called Futarchy, formed by combining “future” and the suffix “-archy,” meaning governance.
Landmark work: "Logarithmic Market Scoring Rules for Modular Information Aggregation"
All of the above are part of official history and would be covered in a timeline on any university microeconomics lecture note. But I believe that metaphysical discussions about prediction markets after that point are essentially meaningless until a16z turned its attention to this space.
Presence and new media
a16z first engaged with the prediction market company Kalshi in 2024, then invested in its $5 billion round in August 2025; whether a discount was applied is currently unknown. Kalshi’s valuation has now reached an astonishing $22 billion, making it the fastest-growing company outside of AI.
After taking a position, a16z launched its media machine, publishing a series of long-form articles explaining why Kalshi is one of the most important companies of this era. While the exchange and casino businesses are undeniably attractive, the potential regulatory pressures and moral risks mean they will never command high P/E multiples in the market—clearly, a16z has its sights set on something beyond this.
So what makes Kalshi, or the entire prediction market sector, so important? a16z’s answer is “presence.”
At this point in time, human interaction with the world is mediated by a layer of plastic film—like being able to browse only the frontend of a website while remaining completely unaware of its backend structure. You can consume the frontend’s audiovisual experience, narratives, and even “real feelings,” but you cannot alter or be truly present.
Not to mention, it’s clear that in the near future, even the transformation of the real world will gradually be outsourced to agents—so where does humanity’s role lie in the course of history? It seems we’re left only with the option of burying our heads in light-colored sheets and crying after eating and drinking our fill.
But prediction markets offer an engaging approach called prediction: you put real money at stake, then, like buying a ticket to enter the stadium, actively participate and observe how probabilities shift throughout the process—willingly accepting theta decay, and sharing screenshots of the prediction market probabilities across all groups, loudly announcing your position and the reasoning behind it.
This feeling is profoundly anti-cynical: in an instant, the infinite distances, the endless people, the selection of cardinals, the thickness of snow in New York, the price movements of crude oil within five minutes, even whether Jesus will return in 2026—all of it becomes connected to you. All the postmodern uncertainty and powerlessness collapse under your confident predictions. You are no longer a gambler; you are a noble super-observer, a prophet of your people, a calm witness to history.
When enough people begin using, discussing, and relying on this medium, the market’s own authority will begin to rise, and Kalshi will hold the final say on the authenticity and importance of events. This is undoubtedly a key component of the new media empire envisioned by a16z.
A diagram explaining the assassination of Charlie Kirk
Case Study: MTS
Finally, let’s talk about new media as defined by a16z. From the first generation of in-house media championed by a16z and YC, to the second generation of VCs like 20VC and Not Boring Capital that emerged from media itself, to the recent acquisition of media outlets like TBPN by companies and institutions, power in media has continuously shifted and decentralized, with the battleground of public opinion moving from blogs and TV shows to Twitter and podcasts.
It’s no longer novel in 2026 for VCs to create content, build brands, and help founders with distribution. a16z’s new media is an end-to-end endeavor, covering everything from upstream narrative framing, midstream product fundraising and promotion, to downstream customer acquisition—all within its scope and executed at a speed far beyond what traditional media or agencies can comprehend.
A campaign that previously took 3 to 6 months to complete is now being finished by new media in just a few weeks—producing founder podcasts, short video clips, AI-generated promotional videos, newsletters about the company’s ethos and development plans, and more—all released with intense frequency over an extremely short period, which they call “taking over the timeline.”
Perhaps the noise from various self-media and AI-generated information is too loud, so we have no choice but to be even louder. And our noise matters more than yours.
MTS (short for "Monitoring The Situation"), a media company that embraces this philosophy, provides 24/7 live news coverage on Twitter, bringing on key figures such as politicians, tech founders, and central personalities in breaking news, then slicing and redistributing the content. They claim to report only on the most important events in the world today—until something even more important happens.
MTS interviews Robinhood
Looking back at Kalshi, everything now makes sense. With just buzz and a16z’s backing, media outlets like MTS could certainly survive, but their influence beyond a16z’s sphere remains limited—more like a fraternity publication or campus newsletter. Prediction markets, however, are different: the trading volume and positions are real money, giving them a certain cold, impartial authority and persuasive power.
Imagine you're a staunch MAGA supporter, and just before the midterm elections, you see that the market on Kalshi for a Republican victory has reached billions of dollars in trading volume, yet the price of the YES option has dropped to $0.10—wouldn't you momentarily wonder: Have the folks on Capitol Hill already known the outcome? Has the fair information market already revealed the future?
This may be the core reason Kalshi is valued at $22 billion—this reality distortion field is rarely achieved by a private company in human history.
TBPN New Media Landscape
Reference:
[1] Alex Danco, “Prediction: the successor to postmodernism,” Andreessen Horowitz, October 10, 2025.
[2] Alex Danco, “Prediction Path Screenshots: A New Kind of Meme,” Andreessen Horowitz, October 10, 2025.
[3] F. A. Hayek, “The Use of Knowledge in Society,” The American Economic Review, Vol. 35, No. 4, pp. 519–530, 1945.
[4] Erik Torenberg, Ben Horowitz, and Marc Andreessen, “a16z’s New Media Playbook,” Andreessen Horowitz Podcast, February 27, 2026.