Bernstein Forecasts Prediction Markets to Hit $1 Trillion by 2030

Prediction markets are entering a period of explosive growth, with Bernstein estimating that total trading volumes will reach $1 trillion annually by 2030. The firm projects that 2026 volumes will hit $240 billion, representing a 370% increase over the previous year. This momentum is already evident, as year-to-date volumes for industry leaders Kalshi and Polymarket have reached $60 billion, surpassing the total market volume of $51 billion recorded for the entirety of 2025. While the 2024 surge was largely driven by the U.S. presidential election, the market has since diversified into macroeconomic, cryptocurrency, and sports contracts. Analysts expect a structural shift in the types of assets traded; while sports currently account for over 60% of volume, this share is expected to halve by 2030 as institutional investors seek discrete exposure to political and economic events. Corporate and insurance firms are also expected to utilize these platforms to hedge specific event risks. Publicly traded companies Robinhood (HOOD) and Coinbase (COIN) are identified as the primary proxies for this trend. Robinhood's prediction hub has already generated $350 million in annual recurring revenue and accounts for approximately 30% of Kalshi's total volume, marking it as the platform's fastest-growing business segment. Despite the optimistic long-term outlook, the sector faces immediate headwinds. Legal challenges are currently pending in 14 states, and four congressional bills are under consideration. A jurisdictional battle persists between the Commodity Futures Trading Commission (CFTC) and various state regulators over who holds the authority to regulate these markets. However, Bernstein maintains that increasing alignment with federal regulators will ultimately drive mainstream adoption.