Bernstein Projects Prediction Markets to Hit $10 Trillion Annually by 2035

Bernstein Raises Its Prediction Market Forecast Tenfold

The Wall Street research firm Bernstein has sharply increased its forecast for the prediction-market industry. It now expects the sector to handle $10 trillion in trading volume every year by 2035, far above its earlier projection of $1 trillion by 2030. For 2026, Bernstein estimates the market will process about $410 billion in volume.

Analysts led by Gautam Chhugani laid out these projections in a client note published on Tuesday. They expect trading to grow by roughly 70% each year through 2035.

Key Numbers

• Industry volume is projected to grow from about $410 billion in 2026 to $10 trillion by 2035.
• Trading activity already expanded from around $50 billion in 2025 to roughly $300 billion in the first eight months of 2026.
• Annual compound growth is expected to be about 70%.

Financial Contracts Set to Overtake Sports

One of the biggest shifts Bernstein highlights is the changing mix of what people are betting on. Sports made up 61% of prediction-market volume in 2025, but Bernstein expects that share to fall to 38% by 2035. Meanwhile, contracts tied to financial assets — such as crypto, stocks, and commodities — are expected to grow from 12% of the market to 49%, becoming the dominant category for the first time.

The firm points to new product types like KPI markets, where users can trade on a single company metric, such as how many units it ships or how many subscribers it gains, rather than its stock price. Perpetual futures — contracts with no expiration date, so positions can be held indefinitely — are also expanding beyond crypto into commodities and individual stocks.

How Major Platforms Are Evolving

Kalshi, one of the largest prediction-market platforms, now controls about 60% of industry volume, up from 35% a year ago. On Kalshi, crypto's share of trading has climbed from under 5% in January to about 20% in August. Commodity trading on the platform has grown from less than $2 million across all of 2025 to roughly $590 million so far in 2026, with $410 million of that total coming in August alone.

Robinhood CEO Vlad Tenev echoed the trend, telling CNBC that crypto is already taking a larger share of trading on the platform. He expects sports to become a minority category within a few years. Robinhood's own event-contract business posted a tenfold revenue increase, reaching $156 million in the second quarter of 2026.

Regulatory Uncertainty and Court Battles

Despite the rapid growth, Bernstein warns that full U.S. regulatory clarity for sports prediction markets is unlikely before 2027 or 2028. The delay comes from conflicting court rulings over whether these contracts should be treated as federally regulated derivatives or as state-regulated gambling products.

Until the legal question is resolved, Bernstein treats the projected 2026 volume as a floor rather than a ceiling for the industry.

Why It Matters

Prediction markets let people trade contracts on whether specific events will happen, from Federal Reserve rate decisions to corporate earnings results. Each contract settles at $1 if the event occurs and $0 if it does not, so the price reflects the market's view of how likely something is. If Bernstein's projections prove accurate, these markets could become a significant way for both individuals and institutions to gain direct exposure to real-world events.

Sources

• Decrypt