Prediction Markets Set to Explode to $1 Trillion Industry by Decade’s End, Bernstein Analysis Reveals

Key Highlights

• Investment firm Bernstein anticipates prediction market trading volumes will surge to $240 billion in 2026 and climb to $1 trillion by decade’s end
• Leading platforms Kalshi and Polymarket have recorded $60 billion in trading activity in early 2026—surpassing 2025’s entire yearly total
• Kalshi’s weekly transaction volume has skyrocketed from $100 million to over $3 billion within a 12-month period
• Enhanced blockchain capabilities and clearer federal oversight are positioned as primary catalysts for expansion
• Investment analysts identify Robinhood and Coinbase as the primary publicly traded vehicles for sector exposure

The prediction market industry is positioned to transform into a trillion-dollar ecosystem before 2030 concludes, based on fresh analysis from Bernstein, a prominent investment research firm.

Bernstein’s research team forecasts that aggregate prediction market transaction volumes will reach $240 billion throughout 2026—representing a remarkable 370% surge compared to the prior year. With a compound annual growth rate hovering around 80%, analysts project the sector will achieve $1 trillion in annual volume by 2030.

The two dominant platforms driving this expansion are Kalshi and Polymarket. Combined, these platforms have processed approximately $60 billion in market activity during the opening months of 2026 alone. This figure has already eclipsed the $51 billion in cumulative volume documented throughout the entirety of 2025.

Kalshi commands over 90% of the domestic prediction market landscape. The platform’s weekly transaction volume has expanded dramatically from approximately $100 million twelve months ago to more than $3 billion currently.

Bank of America’s analyst Julie Hoover characterized Kalshi as among the “fastest growing non-AI companies” operating in America today. She observed that the platform’s expansion trajectory mirrors the explosive growth patterns witnessed during the artificial intelligence revolution.

Key Factors Fueling Rapid Expansion

Prediction markets began capturing significant attention during the 2024 U.S. presidential election cycle. The momentum accelerated throughout 2025 as participants increasingly engaged with contracts covering sports outcomes, cryptocurrency movements, and macroeconomic indicators.

Bernstein’s analyst Gautam Chhugani identifies three critical accelerators: clearer federal regulatory frameworks, strategic distribution partnerships with mainstream platforms, and superior liquidity conditions relative to state-controlled betting infrastructure.

Blockchain infrastructure is emerging as a transformative element. The technology facilitates worldwide liquidity pools and empowers platforms to create contracts addressing highly specialized or narrow-focus events, simultaneously reducing participation barriers for institutional capital.

Chhugani anticipates a significant evolution in contract composition over time. Sports-related contracts currently represent more than 60% of total volume, but he projects that percentage will decline to approximately half by 2030 as institutional-grade contracts focusing on economics, political events, and business outcomes proliferate.

New market entrants are multiplying rapidly. Robinhood, DraftKings, and Underdog have either introduced or are actively developing their own prediction market offerings.

Legal Uncertainties on the Horizon

The industry faces meaningful regulatory headwinds. Legal challenges are currently active across 14 U.S. states, while four separate congressional bills are advancing through the legislative process. Primary concerns include potential insider trading vulnerabilities and jurisdictional questions regarding regulatory authority.

Several states maintain they possess authority to oversee sports-focused prediction contracts. The Commodity Futures Trading Commission, conversely, is asserting exclusive federal jurisdiction over the entire sector.

Chhugani doesn’t anticipate these obstacles will significantly impede long-term industry momentum. He believes platforms such as Kalshi and Polymarket will benefit from increasing cooperation with federal regulatory bodies including the SEC and CFTC.

Robinhood’s prediction markets division has now operated for one year and is producing $350 million in annualized recurring revenue. It represents roughly 30% of Kalshi’s aggregate volume and stands as Robinhood’s most rapidly expanding business segment.

Chhugani specifically highlighted Robinhood and Coinbase as the optimal publicly traded investment vehicles for those seeking indirect exposure to privately held prediction market enterprises.