NEW YORK — In a dramatic pivot that has sent shockwaves through traditional finance and fintech circles, Wall Street brokerage giant Bernstein has massively revised its long-term outlook for the prediction market industry. In a note issued to clients on Tuesday, an analyst team led by Gautam Chhugani projected that the global prediction market sector will handle a staggering $10 trillion in annual trading volume by 2035.
The new figure represents a tenfold expansion of Bernstein’s previous forecast made just months prior in April 2026, when the firm estimated the market would reach $1 trillion by 2030. Furthermore, the newly projected $10 trillion volume is roughly 24 times larger than the $410 billion the firm now expects the industry to process by the end of 2026 alone.
According to Bernstein’s latest tracking data, the explosive demand for event-driven contracts—ranging from macroeconomic indicators to corporate earnings and digital assets—is compounding at an annualized rate of roughly 70% through 2035. What was once viewed as a niche alternative asset class or a digital playground for election hobbyists is rapidly evolving into a foundational pillar of modern global finance.
Main Facts
At its core, a prediction market allows participants to buy and sell "yes" or "no" contracts tied to the outcome of specific future events. These range widely from central bank interest rate decisions and geopolitical milestones to corporate quarterly earnings. Each contract settles at exactly $1 if the predicted event occurs and $0 if it does not. Consequently, the fluctuating price of the contract functions as a real-time, crowd-sourced probability indicator of the event happening.
The primary takeaways from Bernstein’s updated report outline a paradigm shift in what people are betting on:
Explosive Volume Growth: Industry-wide trading volumes have surged from approximately $50 billion in 2025 to roughly $300 billion in the first eight months of 2026 alone.
The Shift Away from Sports: While sports betting historically dominated the space—accounting for 61% of all trading volume in 2025—Bernstein projects that figure will plummet to 38% by 2035.
Rise of Financial Assets: Contracts tied to cryptocurrencies, traditional equities, and commodities (collectively grouped as "financial assets") are set to skyrocket from 12% of the market to 49%, making them the single largest category for the first time.
Kalshi’s Market Dominance: Platforms like Kalshi have captured significant market share. Kalshi now controls roughly 60% of total industry volume, a massive jump from 35% just a year prior.
Chronology: The Rapid Evolution of Prediction Markets
To understand how quickly the prediction market landscape is transforming, it is necessary to examine the trajectory of the industry over the past two years:
Full Year 2025: The sector records a modest, albeit growing, $50 billion in total trading volume. Sports betting accounts for a commanding 61% share of all activity. Financial and crypto-linked assets represent a minor 12% slice. Commodity trading on major mainstream prediction platforms like Kalshi sits at under $2 million for the entire year.
April 2026: Bernstein publishes its initial major institutional forecast, predicting that prediction markets will scale to $1 trillion in volume by 2030. Analysts highlight that future growth will rely heavily on institutional participation, regulatory clarity, and blockchain tokenization rather than purely consumer-driven sports wagers.
January – August 2026: A profound structural pivot occurs. Crypto’s share of volume on leading platforms like Kalshi leaps from under 5% in January to roughly 20% by August. Meanwhile, commodity trading on the same platform explodes from virtually zero to approximately $590 million year-to-date, fueled by an astounding $410 million in August alone.
September 2026: Industry-wide trading hits $300 billion in the first eight months alone, forcing Wall Street analysts to tear up their previous models. Bernstein issues its revised forecast, stretching the timeline to 2035 and raising the target valuation to an unprecedented $10 trillion.
Supporting Data and Market Mechanics
The numbers underpinning Bernstein’s thesis reveal an underlying macro liquidity pool that dwarfs current cryptocurrency and traditional derivatives markets. Bernstein estimates that crypto, stocks, and commodities alone represent a staggering $700 trillion pool of potential speculative and hedging bets today, a pool projected to expand to $900 trillion by 2035.
Should prediction markets capture a mere 0.5% slice of that colossal $900 trillion pool, it would translate to $4.7 trillion a year in volume on financial contracts alone—even without factoring in a single sports wager.
Furthermore, the types of financial contracts available to traders are evolving beyond simple binary outcomes. Bernstein’s note highlights the introduction of "Key Performance Indicator (KPI) markets." These innovative instruments allow users to trade on a single corporate metric—such as vehicle delivery numbers, quarterly subscriber growth, or raw manufacturing output—rather than being forced to buy or short the company’s actual stock.
"We expect new products such as KPI markets, which allow users to trade a single corporate metric, such as production, deliveries, or subscriber growth, rather than the stock price itself," Bernstein’s analysts wrote.
This mechanism allows retail and institutional traders to gain direct, granular exposure to a company’s operational performance without the friction of traditional equities trading. In tandem, perpetual futures—contracts with no expiration date that allow traders to hold positions indefinitely—are expanding rapidly from crypto into traditional commodities and single-stock derivatives.
Official Responses and Industry Leadership
Wall Street is not the only entity taking notice of this monumental structural shift. Fintech heavyweights are actively redesigning their platforms to capture the incoming wave of event-driven and financial contract trading.
Robinhood CEO Vlad Tenev weighed in on the trend during a recent interview with CNBC, confirming that his platform is already experiencing the exact migration away from sports that Bernstein is forecasting.
"We’re already seeing other categories like crypto taking a disproportionate share," Tenev told CNBC. "I think within a few years, sports will actually be in the minority, similar to active trading at large."
Robinhood’s own event-contract business has seen its revenues multiply tenfold, hitting $156 million in the second quarter of 2026 alone. Independent financial projections from Bernstein suggest that prediction markets are well on their way to becoming a major revenue engine for Robinhood as crypto and business-centric categories continue to command a larger portion of user activity.
Regulatory headwinds, however, remain a central point of discussion. Bernstein noted that firm, federally unified regulatory clarity for U.S. sports prediction markets is unlikely to materialize before 2027 or 2028. This delay stems largely from ongoing, conflicting court rulings over whether event contracts should be classified as federally regulated derivatives under the Commodity Futures Trading Commission (CFTC) or as state-regulated forms of gambling.
Despite these legal ambiguities, the sheer momentum of financial, commodity, and macroeconomic prediction contracts has insulated the broader industry, turning what was once considered a ceiling—the $410 billion projected for 2026—into a definitive baseline floor.
Implications for the Future of Finance
The transition of prediction markets from entertainment novelties to institutional-grade financial utilities carries profound implications for global markets:
Decentralized Price Discovery: Traditional equity markets rely heavily on quarterly earnings calls and delayed analyst reports to price assets. Prediction markets offer continuous, real-time crowdsourced forecasting that can often sniff out economic trends, inflation spikes, and corporate misses long before official reports are published.
Institutional Integration: With blockchain-based tokenization enabling global liquidity and long-tail event creation, institutional funds are finding it increasingly practical to use prediction markets for corporate hedging and macro-risk management.
The Disruption of Traditional Betting: As financial assets eclipse sports wagering, the demographic profile of the average prediction market user is transforming. High-net-worth individuals, corporate treasuries, and professional traders are replacing casual sports fans, driving up average contract sizes and overall market depth.
As Bernstein’s updated projections illustrate, the boundary lines separating traditional derivatives, cryptocurrency trading, and prediction markets are dissolving. With a clear runway toward a $10 trillion annual volume by 2035, prediction markets have firmly graduated from the fringes of fintech to become one of the most closely watched financial sectors of the decade.
