Bernstein has upgraded its prediction market forecast to $10 trillion by 2035, indicating significant growth in financial asset contracts.
Bernstein's Bold Forecast
Bernstein has dramatically revised its forecast for prediction market volumes, now estimating an annual total of $10 trillion by 2035. This projection marks a significant increase from the anticipated $410 billion for 2026 and a substantial revision from its earlier prediction of $1 trillion for 2030.
Market Dynamics Shift
The firm, led by analyst Gautam Chhugani, anticipates that contracts tied to financial assets, including cryptocurrencies, stocks, and commodities, will overtake sports betting as the dominant category in the prediction market. The share of financial asset contracts is expected to rise from 12% in 2025 to 49% by 2035, while sports betting is forecasted to decline from 61% to 38%.
Regulatory Landscape and Growth Potential
Despite the increasing trading volumes, Bernstein foresees that comprehensive regulatory clarity for U.S. sports prediction markets will likely not be achieved until 2027 or 2028. This is due to ongoing legal ambiguities regarding whether these contracts should be classified as federally regulated derivatives or state gambling products.
The prediction market is currently experiencing rapid growth, with trading volumes projected to jump from approximately $50 billion in 2025 to nearly $300 billion within the first eight months of 2026. Bernstein's revised forecast suggests a compound annual growth rate of around 70% through 2035.
Emerging Trends in Prediction Markets
New market offerings are expected to emerge, such as Key Performance Indicator (KPI) markets, allowing traders to speculate on specific corporate metrics rather than just stock prices. Additionally, perpetual futures, which are contracts without expiration dates, are expanding from the crypto sector into commodities and individual stocks, providing traders with more flexibility.
Impact on Companies and Future Outlook
Robinhood, for instance, is adapting to this trend as its event-contract business reported a tenfold revenue increase, reaching $156 million in the second quarter of 2026. CEO Vlad Tenev noted that sectors like crypto are gaining significant market share, suggesting that sports might become a minority in the trading landscape in the coming years.
Bernstein estimates that the total potential of crypto, stocks, and commodities stands at $700 trillion, projected to grow to $900 trillion by 2035. Capturing just 0.5% of this market could yield an annual volume of $4.7 trillion from financial contracts alone, excluding sports bets.
As the industry prepares for this transformation, Bernstein now considers the previously estimated $410 billion for 2026 as a baseline rather than a maximum, reflecting the optimistic outlook for prediction markets in the years ahead.
