Investor and Coin Metrics founder Nic Carter has highlighted significant challenges facing prediction markets, despite their potential to become a cultural phenomenon by 2025/26. In a recent article, Carter identified market fragmentation and the lack of natural buyers and sellers as key issues, which hinder their effectiveness as hedging tools. He noted that for corporate hedging to function effectively, a large number of speculative traders are needed to support liquidity. Carter also raised concerns about insider trading, which, while potentially valuable for market predictions, is illegal and could erode trader confidence. He pointed out that current prediction markets are heavily reliant on sports betting, and scandals in non-sports sectors could further undermine market fairness and lead to user attrition. Despite their social value, Carter believes that prediction markets face significant hurdles in achieving the vision of their early proponents, with future growth likely centered on sports and cultural markets.