Original Title: "Offering a $200,000 Salary, Wall Street Enters the Prediction Market"
Original Author: Niuke, Deep Tide TechFlow
It has finally arrived. Once built by political enthusiasts, speculative retail investors, and arbitrage seekers, prediction markets are now welcoming a new group of silent yet deadly players.
According to a report by the Financial Times on Thursday, several well-known trading firms, including DRW, Susquehanna, and Tyr Capital, are forming dedicated teams to trade in prediction markets.
Last week, DRW posted a job advertisement offering a base salary of up to $200,000 for traders who can "monitor and trade active markets in real-time" on platforms such as Polymarket and Kalshi.
Options trading giant Susquehanna is hiring prediction market traders who can "detect incorrect fair values," identify "abnormal behaviors" and "inefficiencies" in prediction markets, and is also assembling a dedicated sports trading team.
The crypto hedge fund Tyr Capital is continuing to hire predictive market traders "who are already running complex strategies."
The data supports this expansion ambition.
The monthly trading volume surged from less than $100 million at the beginning of 2024 to over $8 billion by December 2025, with a record single-day trading volume of $701.7 million on January 12.
When the pool of capital is deep enough to support the scale of giants, the entry of Wall Street becomes inevitable.
Arbitrage Priority
In the prediction market, institutions and retail investors are essentially playing entirely different games.
Retail investors often rely on fragmented information to predict individual events, which is essentially a form of gambling. In contrast, institutional players focus on cross-platform arbitrage and structural market opportunities.
In October 2025, Boaz Weinstein, founder of the hedge fund Saba Capital Management, stated at a closed-door meeting that prediction markets can enable portfolio managers to hedge their investments with greater precision, especially regarding the probability of specific events occurring.
Standing next to Polymarket CEO Shayne Coplan at the time, he said, "A few months ago, Polymarket showed a 50% probability of an economic recession, while credit markets indicated a risk of about 2%. You can think of countless pairs trades that weren't possible before."
According to Weinstein's view, hedge fund managers can buy contracts on Polymarket that bet "the economy will not enter a recession," because the market currently assigns a 50% probability of recession, making this contract relatively cheap.
At the same time, one can short certain bonds or credit products that would sharply decline during an economic recession in the credit market. Since the credit market only assigns a 2% probability of a recession, the prices of these products are still very high.
If the economy truly enters a recession, you might lose a small amount of money on Polymarket, but you can make a significant profit in the credit market, as those overvalued bonds will crash.
If the economy does not decline, you make money on Polymarket, and you might incur a small loss in the credit market, but overall you still make a profit.
The emergence of prediction markets provides traditional financial markets with a brand-new "price discovery tool."
The privileged class is coming.
What tips the scales even more are privileges at the rule level.
Susquehanna is the first market maker of Kalshi and has reached a match contract agreement with Robinhood.
Kalshi offers market makers various benefits, including lower fees, special trading limits, and more convenient trading channels, though the specific terms are not publicly disclosed.
The entry of market makers will quickly change this market.
Previously, prediction markets often suffered from liquidity issues, especially for niche events. When you wanted to buy or sell a large number of contracts, you might face significant price spreads or be unable to find counterparties altogether.
Professional institutions will quickly eliminate obvious pricing errors. For example, price differences for the same event across different platforms, or clearly unreasonable probability-based pricing, will be rapidly smoothed out.
This is not good news for retail traders. In the past, you might have found that the probability of "Trump winning" was 60% on Polymarket and 55% on Kalshi, allowing for simple arbitrage opportunities. Such opportunities will basically disappear in the future.
With PhDs on Wall Street earning hundreds of thousands of dollars in annual salaries, future prediction contracts may also enter an era of professionalization and diversification, going beyond merely single-event predictions, such as:
1. Multi-event combination contracts, similar to accumulator bets in sports betting
2. Time series contract, predicting the probability of an event occurring within a specific time period.
3. Product of conditional probabilities, what is the probability of event B occurring given that event A has occurred?
...
Looking back at financial history, we can see that from foreign exchange to futures, and then to cryptocurrencies, the development of every emerging market follows a similar trajectory: individual retail investors ignite the initial spark, and eventually, institutions take over the entire forest.
The prediction market is repeating this process. Ultimately, technological advantages, capital scale, and privileged access will determine who remains in this game of probabilities.
For individual investors, although there may still be a sliver of opportunity in long-term cycle predictions or niche areas, they must face reality: when Wall Street's sophisticated machinery starts operating at full speed, the era of easily profiting from information gaps may be gone forever.
Click to learn about BlockBeats' job openings.
Welcome to join the official Lulin BlockBeats community:
Telegram Subscription Group:https://t.me/theblockbeats
Telegram discussion group:https://t.me/BlockBeats_App
Official Twitter account:https://twitter.com/BlockBeatsAsia