Bernstein Revises Prediction Markets Forecast to $10 Trillion by 2035

Summary

• Bernstein has updated its prediction market volume estimate to $10 trillion annually by 2035, a significant increase from the $410 billion anticipated in 2026 and a major revision from its previous $1 trillion forecast for 2030.
• Financial asset contracts, including crypto, stocks, and commodities, are projected to surpass sports betting as the primary category in the industry, increasing from 12% of total volume in 2025 to 49% by 2035, while sports betting is expected to drop from 61% to 38%.
• According to Bernstein, comprehensive regulatory clarity for sports prediction markets in the U.S. is unlikely to materialize before 2027 or 2028, despite platforms like Kalshi and Polymarket already processing substantial volumes.

Wall Street's outlook on prediction markets has dramatically escalated, with Bernstein now forecasting that the annual trading volume will reach $10 trillion by 2035. This figure is approximately 24 times the $410 billion expected for this year and ten times the earlier projection of $1 trillion for 2030.

Gautam Chhugani and his team at Bernstein shared these insights with clients on Tuesday, predicting a compound annual growth rate of about 70% through 2035. The market's trading volume is already seeing substantial growth, escalating from around $50 billion in 2025 to nearly $300 billion in the first eight months of 2026.

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In 2025, sports betting accounted for 61% of trading volume, a figure Bernstein anticipates will decline to 38% by 2035. Conversely, contracts related to financial assets are expected to grow significantly from 12% to 49%, marking their emergence as the largest category in the market.

"We anticipate new offerings such as KPI markets, which enable trading on specific corporate metrics like production or subscriber growth, rather than solely on stock prices," the analysts stated.

This development allows traders to wager on whether a company will deliver more units in a given quarter without directly trading its stock. Furthermore, perpetual futures, which are contracts without expiration, are expanding from crypto into commodities and individual stocks, providing traders with the flexibility to maintain positions indefinitely.

Prediction markets facilitate trading on "yes" or "no" contracts regarding various events, from Federal Reserve decisions to corporate earnings. Each contract settles at $1 if the event occurs and $0 if it does not, making the price a continuous bet on the likelihood of the outcome.

Kalshi's volume from crypto surged from under 5% in January to approximately 20% by August. Meanwhile, commodity trading on the platform skyrocketed from less than $2 million in all of 2025 to about $590 million so far this year, with $410 million occurring in August alone. Kalshi now commands around 60% of the industry's volume, an increase from 35% a year prior.

Previously, in April, Bernstein had estimated a more conservative $1 trillion in prediction market volume by 2030, up from $51 billion in 2025. At that time, the firm suggested that growth would be driven more by institutional involvement than by larger sports bets.

"We foresee an institutional market emerging around economic, business, and political contracts, as investors seek more precise exposure to events," they noted earlier. They also highlighted the underlying factors for this shift: "Growing regulatory clarity at the federal level is broadening the market, while blockchain-based tokenization and integration with crypto markets are facilitating global liquidity and participation from institutions."

The timeline for achieving this ambitious growth has extended from 2030 to 2035, indicating that the data Bernstein has gathered over the summer supports a more aggressive forecast than previously anticipated.

Bernstein estimates that the combined potential for crypto, stocks, and commodities currently stands at $700 trillion, projected to grow to $900 trillion by 2035. Capturing just 0.5% of this pool would equate to $4.7 trillion annually in volume from financial contracts alone, excluding any sports-related bets.

Robinhood's CEO, Vlad Tenev, is already adapting to this trend, noting, "We're witnessing other categories like crypto taking an outsized share. I believe that in a few years, sports will be in the minority, akin to broader active trading trends."

Robinhood's event-contract business reported a tenfold increase in revenue, reaching $156 million in the second quarter of 2026. Bernstein anticipates that prediction markets will become a substantial revenue source for Robinhood this year as crypto categories continue to dominate trading on the platform.

Bernstein has indicated that definitive regulatory clarity for U.S. sports prediction markets is not expected until 2027 or 2028, citing inconsistencies in court rulings regarding whether these contracts are federally regulated derivatives or fall under state gambling regulations.

Until there is resolution on this issue, the industry is projected to finish 2026 with a volume of $410 billion, which Bernstein now considers a baseline rather than a maximum.