Ethereum co-founder Vitalik Buterin has highlighted the potential risks and benefits associated with prediction markets. He emphasized their capacity to reward truth and accuracy but cautioned that if they become too influential, they might begin to shape reality. Buterin noted that due to their smaller size and limited price ranges, prediction markets are less susceptible to manipulation compared to traditional markets. Buterin also discussed the utility of price prediction tools in gauging market sentiment, while advising that they should not dictate real-world outcomes. He underscored the importance of the fear and greed index as a crucial indicator for traders assessing market cycles.