I think it started with Robin Hanson, one of his Big Ideas is that public policy should be decided by prediction markets instead of democratic processes. He calls this hypothetical system “futarchy” and lesswrong is one of the very few places it’s taken seriously.

In the bigger picture, I think it’s popular in Rationalist circles because it just fits in with their biases. Using markets to evaluate truth claims gives a plausible-sounding excuse to disregard expert opinion, and (much like their “Bayesianism”) gives their personal opinions a veneer of precision and objectivity via quantification.

It’s perhaps worth noting that FTX also ran prediction markets before it collapsed.

He’s the L. Ron Hubbard of our times, a sci-fi author turned cult leader of the information age just as Hubbard was for the space age.