Bernstein forecasts a major shift in prediction markets by 2035, with financial assets expected to dominate market activity.
Bernstein analysts predict a transformative shift in prediction markets, with financial asset contracts likely to lead market activity by 2035. They estimate that cryptocurrencies, stocks, and commodities could comprise 49% of this activity, overtaking the 38% associated with sports, as detailed in a report by The Block.
The total annual trading volume for these markets is forecasted to soar to $10 trillion by 2035, a dramatic rise from around $410 billion in 2026, reflecting a compound annual growth rate of approximately 70% from 2025.
Bernstein noted a surge in market activity, escalating from $50 billion in 2025 to $300 billion from January to August 2026. In 2025, sports dominated market volume at 61%, while financial asset contracts accounted for about 12%.
Increase in Financial Contracts
Evidence of this shift is already visible in the 2026 trading landscape. The growth is largely driven by short-term contracts in cryptocurrencies and commodities, including rapid 15-minute bitcoin markets. Sports volumes also experienced a significant rise during the World Cup, maintaining elevated levels afterward.
On Kalshi, the proportion of cryptocurrency contracts increased from under 5% in January to around 20% by August. Commodity contract trading volume surged from less than $2 million in 2025 to approximately $590 million in 2026, with $410 million occurring alone in August. Kalshi represented nearly 60% of the total market volume from January to August, up from 35% in 2025.
On the other hand, Polymarket showed a different trend where sports contracts accounted for about 52% of global volume in 2026, a rise from 39% in 2025. The share of political contracts fell from 32% to 22%, while cryptocurrencies held steady at around 21%.
Analysts predict further expansion in the types of financial contracts available. They anticipate the launch of new products, including KPI markets that allow trading based on specific corporate metrics rather than just stock prices. Additionally, there are plans to extend perpetual futures beyond cryptocurrencies to commodities and individual stocks, with announcements from Kalshi and Polymarket in April about new digital asset-related products.
Bernstein estimates the market for financial asset contracts could reach around $700 trillion by the end of 2025, growing to $900 trillion by 2035. If prediction markets capture approximately 0.5% of this total, financial contracts could generate around $4.7 trillion in annual trading volume, nearly half of the projected $10 trillion.
However, regulatory issues surrounding sports contracts in the U.S. pose a challenge. Analysts do not expect clarity on this front until 2027-2028, citing conflicting court decisions regarding federal oversight and state authority over gambling regulations.
Previously, in April, Bernstein had anticipated that annual trading volume in prediction markets would hit $1 trillion by 2030, emphasizing sports as an entry point while linking long-term potential to financial, economic, and political contracts.
