Ethereum co-founder Vitalik Buterin has criticized the prediction markets. He is worried about where these platforms are heading. Instead of short-term betting, he wants them to help regular people deal with rising costs.
As per Buterin, prediction markets are becoming “unhealthy” products focused on speculation. They are not building anything useful, he said in a recent X post. These platforms have blown up in popularity. They often serve as gambling sites for everything from election outcomes to crypto prices.
Buterin argues that prediction markets should shift toward becoming generalized hedging platforms—especially when paired with AI—to provide better long-term value and protect users from risks like rising costs.
Your completely free resource hub designed to boost your knowledge of cryptocurrencies
His specific vision:
- Create price indices for major categories of goods and services people buy (e.g., groceries, rent, and gas; treating items in different regions as separate categories).
- Run prediction markets on each of these indices.
- Each user (individual or business) would have a local AI agent (LLM) that understands their personal spending patterns and curates a personalized basket of prediction market shares—equivalent to “N days” of their expected future expenses.
People could then hold stocks, ETH, or other assets to grow wealth while using these personalized shares for stability. This creates a hedge against price increases and may potentially reduce or even replace the need for fiat currencies as a store of value.
The Other Side of the Coin
Prediction markets have plenty of defenders despite Buterin’s concerns. “These markets are more accurate than traditional polls. They should be treated as public goods, ” says Harry Crane, a statistics professor at Rutgers University.
Government opponents want to restrict these platforms. That’s because they offer insights that can’t be easily manipulated by centralized authorities. Platforms like Polymarket provide alternatives to official sources or media reports. These can be spun to shape public opinion. When real money’s on the line, people are way more honest about what they think will actually happen.
