With crypto in a bear market, some crypto investors are looking for alternatives. Prediction markets are one option. On Kalshi, it’s possible to buy contracts that pay out if a specific outcome occurs, including those tied to a given cryptocurrency’s price on a given date.

Kalshi also lists perpetual futures for Ethereum (ETH +0.54%), XRP (XRP -1.05%), and a dozen other coins, and to many investors, getting paid for a correct prediction sounds like a cheaper way to earn a return than buying and holding. But does that actually make sense, or is there a flaw in the logic?

Image source: Getty Images.

This is a bad idea if you aren’t a hedge fund

Outcome markets are simple on the surface, but they’re actually very complex (thus, risky and…