Perps and Prediction Markets Are Not the Same Trade
BeInCrypto
Perpetual futures and prediction markets are distinct financial instruments requiring different strategies regarding risk management and event-based probability.Summary
Perpetual futures (perps) and prediction markets serve different functions for traders. Perps provide continuous, leveraged price exposure but carry the risk of liquidation if market timing is off. In contrast, prediction markets allow users to bet on the probability of specific events with fixed risks, eliminating margin calls and liquidation. Rather than being competing products, sophisticated traders use both to hedge or express views on macro events versus general price action. Institutional interest, including investments from entities like the owner of the New York Stock Exchange, underscores the growing importance of prediction markets as information-discovery tools.
(Source：BeInCrypto)