Prediction markets will grow to $1 trillion by 2030, Bernstein says

Prediction market volumes are booming in 2026, according to Bernstein; It will more than quadruple this year alone, reaching an estimated $1 trillion over the next four years.

The investment bank wrote in a report on Tuesday that volumes had already increased in the first few months of this year, with the two largest platforms, Kalshi and Polymarket, seeing around $60 billion in market volume since the beginning of the year; That’s more than $51 billion of the total forecast market volume for all of 2025.

According to Bank of America, the platforms’ growth rates are rivaling the artificial intelligence boom. Weekly trading volume for Kalshi, which controls more than 90% of the U.S. prediction market, has grown from about $100 million a year ago to more than $3 billion today, analyst Julie Hoover wrote in a note last week that called Kalshi one of the “fastest-growing non-AI companies” in the U.S.

While prediction market volumes first rose during the US presidential election in 2024, they surpassed these levels in 2025 as sports, cryptocurrency and macroeconomic contracts became popular.

$1 trillion by 2030

Bernstein analyst Gautam Chhugani predicts that the total market volume will reach $240 billion in 2026, an increase of 370% compared to last year. Chhugani predicts an estimated market transaction volume of $1 trillion per year by the beginning of the next decade, with a compound annual growth rate of roughly 80% between 2025 and 2030.

Chhugani expects increased regulatory clarity at the federal level will increase the potential market, and blockchain tokenization and integration with cryptocurrencies will provide greater liquidity. He said that the structure of contracts traded will also likely change.

“We are waiting [the] “The institutional market needs to evolve around economic, business and political contracts as investors seek more direct and disaggregated exposure to events,” he wrote. While sports contracts account for more than 60% of trading volume today, he predicts this will halve by 2030. “We also expect hedging demand from corporations, [and] insurance companies exposed to certain event risks.”

While Kalshi and Polymarket dominate this space, new names also continue to exist. robinhood, DraftKings Bank of America’s Hoover said he and Underdog have launched or already have launched their own prediction market verticals.

Public proxies

Robinhood and Coinbase Global These are key public market representatives for private prediction market companies, Chhugani said. Robinhood’s prediction markets hub is now a year old, generating $350 million in annual recurring revenue and accounting for about 30% of Kalshi’s total volume. The market is the digital finance platform’s fastest-growing business and could encourage Robinhood to develop its own exchange, the analyst said.

While Chhugani’s long-term predictions assume resolution of long-term regulatory risk, short-term state and federal regulators and the prediction markets themselves are in an uphill battle. “Legal action is currently pending in 14 states, as well as 4 more congressional bills.” [are] “It is also pending due to insider trading concerns,” Hoover wrote.

While some states are taking legal action against prediction markets, asserting their authority to regulate sports betting, the Commodity Futures Trading Commission is fighting states, claiming it has sole authority to regulate prediction markets.

However, Chhugani believes this will not spoil the multi-year outlook.

“Despite ongoing regulatory challenges at the state level, we expect platforms like Kalshi, Polymarket, and public trustees (HOOD, COIN) to benefit from increased regulatory clarity and increased compliance with federal regulators (SEC, CFTC), which is a key driver of market legitimacy and mainstream adoption,” he wrote.

Disclosure: CNBC and Kalshi have a business relationship that includes a minority investment in CNBC.

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