Analysts at Bernstein have forecasted a significant change in the structure of prediction markets, with financial asset contracts expected to dominate. By 2035, cryptocurrencies, stocks, and commodities could account for 49% of market activity, surpassing the 38% attributed to sports, as reported by The Block.
The total annual trading volume in these markets is projected to reach $10 trillion by 2035, a significant increase from approximately $410 billion in 2026. The compound annual growth rate from 2025 is estimated to be around 70%.
According to Bernstein, overall activity in the industry surged from about $50 billion in 2025 to $300 billion from January to August 2026. In 2025, sports accounted for 61% of prediction market volume, while financial asset contracts represented roughly 12%.
Financial Contracts Gain Market Share
The shift is already evident in the trading structure of 2026. Bernstein attributes this growth to short-term contracts in cryptocurrencies and commodities, including 15-minute bitcoin markets. Concurrently, sports volumes saw a notable spike during the World Cup, maintaining high levels even post-tournament.
On Kalshi, the share of cryptocurrency contracts rose from under 5% in January to about 20% by August. The trading volume for commodity contracts jumped from less than $2 million for all of 2025 to around $590 million in 2026, with $410 million occurring just in August. Kalshi accounted for nearly 60% of the total market volume from January to August, up from 35% in 2025.
Conversely, on Polymarket, the structure is different, with sports contracts contributing approximately 52% of global volume since the beginning of 2026, compared to 39% in 2025. The share of political contracts dropped from 32% to 22%, while cryptocurrencies held around 21%.
Analysts anticipate further expansion of financial contract offerings.
“We expect the introduction of new products such as KPI markets, enabling users to trade on specific corporate metrics like production volume, supply, or subscriber growth, rather than just stock prices,” the experts noted.
They also highlighted the expansion of perpetual futures beyond cryptocurrencies into commodities and individual stocks. Products related to digital assets, with future expansions into other classes, were announced by Kalshi and Polymarket in April.
Bernstein estimates the potential market for financial asset contracts at around $700 trillion by the end of 2025, with expectations to grow to $900 trillion by 2035.
The model suggests that prediction markets could capture about 0.5% of this total. If so, financial contracts would generate approximately $4.7 trillion in annual trading volume—almost half of the projected $10 trillion.
One hurdle for the U.S. market remains the regulation of sports contracts. Analysts do not foresee clarity before 2027-2028, pointing to conflicting court rulings regarding federal oversight of derivatives and individual states' authority in gambling regulation.
In April, Bernstein had previously projected the annual trading volume of prediction markets to reach $1 trillion by 2030, identifying sports as an entry point while linking long-term potential to financial, economic, and political contracts.
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