Bernstein has sharply increased its long-term outlook for prediction markets, forecasting annual trading volume of $10 trillion by 2035, up from an expected $410 billion in 2026. Analysts led by Gautam Chhugani model roughly 70% annual compounding growth from 2025 through 2035, after activity accelerated from about $50 billion in 2025 to around $300 billion through August 2026.
The upgrade depends less on sports betting growth and more on prediction markets resembling conventional financial derivatives. Bernstein expects financial-asset contracts to rise from 12% of volume in 2025 to 49% by 2035, making them the industry's largest category, while sports is projected to fall from 61% to 38%. The firm calculates crypto, equities and commodities represented a roughly $700 trillion addressable market in 2025, potentially reaching $900 trillion by 2035. Capturing just 0.5% of that pool would generate about $4.7 trillion in annual financial-asset volume.
Short-duration crypto and commodity contracts are already driving the shift. Bernstein pointed to 15-minute bitcoin markets as a major source of 2026 growth. Crypto's share of Kalshi volume rose from less than 5% in January to about 20% in August, while commodity volume increased from under $2 million in 2025 to approximately $590 million through August 2026. Kalshi accounted for roughly 60% of industry trading volume through August. On Polymarket, sports represented about 52% of global volume, politics 22% and crypto approximately 21%.
Bernstein also expects product design to evolve further, including KPI markets allowing users to trade single corporate metrics such as production, deliveries or subscriber growth, and perpetual futures expanding from crypto to commodities and single-stock perps. Kalshi has already filed for perpetual futures tied to individual U.S. stocks and ETFs, while Tradeweb has integrated Kalshi market data into established trading workflows.
The main risk is regulation, particularly around U.S. sports contracts. Bernstein expects the conflict between federal derivatives oversight and state gaming authority to remain unresolved until at least 2027 or 2028. Even so, the forecast marks a substantial increase from Bernstein's April estimate of $1 trillion by 2030.
