Bernstein has released a research report predicting that the annual trading volume of global prediction markets will reach $10 trillion by 2035, with financial contracts linked to crypto assets, stocks, and commodities replacing sports as the largest trading category.

A team led by Bernstein's chief analyst Gautam Chhugani estimates that the global prediction market trading volume will be around $50 billion in 2025. In the first eight months of 2026, the trading volume has already reached approximately $300 billion, with an annual forecast of $410 billion, a 71% increase from the agency's prediction in April. In April, Bernstein had only predicted that prediction markets would reach $1 trillion by 2030, but this time extended the forecast to 2035 and increased the figure tenfold. According to this prediction, the compound annual growth rate from 2025 to 2035 will be about 70%; even starting from the 2026 baseline, it will still need to grow by about 43% each year thereafter.

In terms of category structure, sports contracts will account for 61% of the prediction market trading volume in 2025, while financial contracts such as crypto, stocks, and commodities will only account for 12%. Bernstein predicts that by 2035, the share of sports will drop to 38%, while financial contracts will rise to 49%, corresponding to an annual trading volume of about $4.7 trillion. The core assumption of this model is that crypto, stocks, and commodities constitute a potential trading pool of about $700 trillion, which will expand to $900 trillion by 2035. The prediction market only needs to capture 0.5% of that trading volume to reach the aforementioned scale.

Kalshi is the biggest beneficiary of this growth. By August 2026, Kalshi accounted for about 60% of the industry's trading volume, up from about 35% a year earlier. The share of crypto contracts on its platform rose from less than 5% in January to about 20% in August, primarily driven by short-term Bitcoin contracts. The trading volume of commodity contracts increased from less than $2 million for the entire year of 2025 to $590 million since 2026, with $410 million contributed in August alone.

Polymarket's structure is shifting towards sports. This year, sports accounted for about 52% of its global trading volume, down from 39% in 2025. Political contracts dropped from 32% to 22%, while crypto contracts accounted for about 21%. Brokerage channels are also expanding: Robinhood's event contract business reached $156 million in revenue in the second quarter of 2026, a tenfold year-on-year increase.

On the product and regulatory front, platforms are expanding categories to include binary options on public company KPIs, perpetual contracts, and contracts on individual stocks. Cboe is advancing the "Cboe Clear US" central counterparty clearing solution, preparing to enter the event contract space. Bernstein believes that the regulatory discrepancies between federal and state levels for U.S. sports prediction markets will be difficult to fully clarify before 2027 to 2028. This is also one of the reasons why the model predicts that the share of financial contracts will surpass that of sports.

In terms of market mechanisms, the buyers are mainly retail investors: crypto and stock traders trading short-term binary contracts through platforms like Kalshi, Polymarket, and Robinhood, as well as users who originally placed bets on sports betting platforms. The sellers and liquidity providers are primarily professional market makers like Susquehanna, who profit from bid-ask spreads and hedging. Funds are flowing from traditional sports betting, retail options, and crypto leveraged products to event contract exchanges regulated by the CFTC. Beneficiaries include trading and distribution platforms like Kalshi, Polymarket, Robinhood, and Coinbase, as well as exchange groups like Cboe, CME, and ICE that are positioning themselves in event contracts. Traditional sports betting operators like DraftKings and FanDuel, state governments relying on state betting taxes, and some retail options and crypto contract brokerage businesses are under pressure.

Supplementary data: Since 2026, the global prediction market's average monthly trading volume has exceeded $37 billion, approximately three-quarters of the total trading volume for 2025. In August alone, the trading volume of Kalshi's commodity contracts was over 200 times that of the entire year of 2025.

Source: Public Information