Key Takeaways
- Investment firm Bernstein anticipates prediction market trading volumes will surge to $240 billion in 2026 and escalate to $1 trillion by 2030
- Leading platforms Kalshi and Polymarket have accumulated $60 billion in trading activity in early 2026 — surpassing 2025’s entire year
- Kalshi’s weekly trading activity has skyrocketed from $100 million to beyond $3 billion over a 12-month period
- Industry expansion is being fueled by blockchain technology adoption and increasing federal regulatory framework
- Robinhood and Coinbase identified as primary publicly-traded investment opportunities for sector exposure
The prediction market industry is positioned to achieve trillion-dollar status before 2031, based on fresh analysis from Bernstein, a prominent investment research firm.
Bernstein’s research team forecasts that aggregate prediction market trading volumes will climb to $240 billion throughout 2026 — representing a remarkable 370% increase compared to 2025 figures. With an estimated compound annual growth rate approaching 80%, analysts project the sector will achieve $1 trillion in annual volume by the decade’s conclusion.
Polymarket and Kalshi stand as the dominant forces within this emerging industry. Combined, these platforms have processed approximately $60 billion in market activity during the opening months of 2026. This figure has already eclipsed the $51 billion total volume recorded throughout all of 2025.
[[LINK_START_1]]Kalshi[[LINK_END_1]] commands over 90% market dominance in U.S. prediction market operations. The platform’s weekly transaction volume has experienced exponential expansion, climbing from approximately $100 million twelve months ago to exceeding $3 billion currently.
Bank of America’s Julie Hoover, a financial analyst, characterized Kalshi as among the “fastest growing non-AI companies” operating in America. Her assessment highlighted that the platform’s expansion trajectory matches growth patterns observed during the artificial intelligence sector explosion.
Forces Propelling Market Expansion
Prediction market platforms began attracting significant attention surrounding the 2024 United States presidential election cycle. Momentum sustained through 2025 as participants increasingly traded contracts centered on sporting events, digital currencies, and broader economic indicators.
Gautam Chhugani, an analyst at Bernstein, identifies three primary catalysts driving expansion: enhanced federal regulatory frameworks, strategic partnerships with mainstream distribution channels, and superior liquidity profiles relative to state-controlled wagering platforms.
Blockchain infrastructure is contributing significantly to sector development. The technology facilitates worldwide liquidity pools and empowers platforms to create contracts addressing highly specialized or uncommon events, simultaneously reducing participation barriers for institutional capital.
Chhugani anticipates the contract composition will transform gradually. While sports-related contracts currently represent more than 60% of overall volume, he projects this proportion will decline to approximately half by 2030 as institutional contracts focused on economics, political events, and corporate developments expand.
Additional competitors are joining the marketplace. Robinhood, DraftKings, and Underdog have either introduced or are actively developing proprietary prediction market offerings.
Legal Challenges on the Horizon
The industry faces ongoing legal complications. Litigation is currently active across 14 U.S. states, with four separate congressional proposals also under consideration. Key concerns encompass insider trading risks and jurisdictional authority disputes regarding platform oversight.
Various state governments contend they maintain regulatory authority over sports-focused prediction contracts. The Commodity Futures Trading Commission disputes this position and asserts exclusive federal jurisdiction throughout the sector.
Chhugani maintains confidence that these obstacles won’t fundamentally disrupt sustained growth trajectories. He observes that platforms including Kalshi and Polymarket are experiencing improved relationships with federal oversight bodies such as the SEC and CFTC.
Robinhood’s prediction market division has completed one year of operations and is producing $350 million in annualized recurring revenue. This segment represents approximately 30% of Kalshi’s aggregate volume and ranks as Robinhood’s most rapidly expanding business unit.
Chhugani identified Robinhood and Coinbase as the principal publicly-traded investment vehicles for market participants seeking exposure to privately-held prediction market enterprises.
