Bernstein: Prediction Markets Could Reach $10 Trillion by 2035, Robinhood Well-Positioned to Lead
nashnova research
Bernstein projects global prediction-market volume will grow from roughly $410 billion in 2026 to about $10 trillion by 2035, a ~70% CAGR. This means prediction markets are evolving from a sports-betting offshoot into a new trading infrastructure spanning finance, politics, and economic data.
What are prediction markets, and why are they surging now?
Prediction markets — platforms where you trade directly on the outcome of a specific event, such as "Will the Fed cut rates next month?" — are expanding fast. Global volume jumped from roughly $50 billion in 2025 to about $300 billion in the first eight months of 2026.
After the World Cup ended, trading volume stayed near all-time highs — new users did not leave with the tournament. This means → user retention has moved past the "bet while you watch" phase into genuine trading habit formation.
Bernstein argues the endgame is not "a bigger online sportsbook" but a comprehensive event-trading platform.
How will the trading mix shift — and what replaces sports?
In 2025, sports contracts accounted for roughly 61% of prediction-market volume; financial assets just 12%.
By 2035, Bernstein expects the mix to flip: sports drops to about 38%, while crypto, equities, and commodities rise to roughly 49% — becoming the largest category.
In plain terms = today's dominant users are sports fans; in a decade, the dominant users will be traders and fund managers.
Why would institutional money enter — and what can it do?
Prediction markets let institutions hedge directly on specific events. In plain terms = a bond investor wanting to hedge "Will the Fed cut?" used to rely on Treasury futures as a proxy; now the exact outcome is tradeable.
Early signals are already here: Kalshi completed the industry's first institutional block trade in April; Polymarket executed the first on-chain institutional block trade in June, hedging Nvidia H100 GPU compute-rental costs.
Bernstein estimates institutional trading could reach roughly 50% of non-sports prediction-market volume by 2035 — about $3 trillion.
What is the "KPI market" concept?
Bernstein floats a forward-looking idea: investors may eventually skip buying a company's stock entirely and trade specific operating metrics — quarterly vehicle deliveries, subscriber growth, and the like.
This means → you are no longer betting on "Will this stock go up?" but on "Will this KPI hit target?" — stripping out macro noise (rates, geopolitics) from the trade.
This reflects an ambition far beyond replacing sportsbooks — prediction markets want to cut into core functions of traditional financial markets.
Why is Robinhood seen as best positioned?
Bernstein argues the critical moat in prediction markets is user distribution — trading and clearing infrastructure can be bought or built, but a large base of funded retail accounts takes years to accumulate.
Robinhood has the consumer app and a massive retail client base, has built exchange and clearing capabilities through Rothera, and still offers contracts from Kalshi, ForecastEx, and Crypto.com to widen product coverage.
In plain terms = Robinhood has the people (users), the pipes (infrastructure), and the willingness to sell other platforms' products — the best starting position on this track.
What is the biggest risk, and when will it clear?
Regulation remains the largest uncertainty. The core dispute: are sports-event contracts financial derivatives under the CFTC, or sports-betting products regulated state by state?
This means → if classified as betting, platforms face a patchwork of state licenses and tax rates; if classified as derivatives, they fall under unified federal oversight with lower expansion friction.
Bernstein expects the long-term regulatory framework for sports prediction markets may not clarify until 2027–2028 — that window will determine whether the industry's structural opportunity can be realized.
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