Bernstein predicts that the prediction market will reach $10 trillion by 2035, ten times its original forecast.

Bernstein analysts led by Gautam Chhugani told clients Tuesday that prediction markets could process $10 trillion a year by 2035, replacing the firm's April forecast of $1 trillion by 2030. The new target is roughly 24 times the $410 billion Bernstein expects for 2026 and 10 times its prior 2030 estimate. The move expands Wall Street's prediction-market forecast and stretches the deadline for tenfold growth from 2030 to 2035; data Bernstein tracked over the summer made its own April forecast look conservative.

Financial Contracts Are Expected to Overtake Sports

Bernstein expects the composition of prediction-market volume to change as much as its size. Sports contracts made up 61% of industry volume in 2025, but the firm expects that share to fall to 38% by 2035. Contracts tied to crypto, stocks and commodities, grouped as financial-asset contracts, are projected to rise from 12% of volume in 2025 to 49% by 2035, making them the industry's biggest category for the first time.

These markets let users trade "yes" or "no" contracts on events such as a Federal Reserve rate decision, company earnings, or whether a firm ships more units in a quarter without buying or shorting its stock. Each contract settles at $1 if the event occurs and $0 if it does not, so the contract price becomes a running bet on the odds.

The analysts also pointed to the spread of perpetual futures, contracts with no expiration date that can be held indefinitely rather than closing on a set day. They said perpetual futures are expanding from crypto to commodities and single-stock perpetual futures, adding another way for traders to take event-linked positions.

Kalshi, Polymarket and Robinhood Show the Shift

The category shift is already visible in platform data. Crypto accounted for under 5% of Kalshi's volume in January but rose to about 20% in August, Bernstein said. Commodity trading on Kalshi grew from less than $2 million in all of 2025 to roughly $590 million so far in 2026, including $410 million in August alone. Kalshi now controls about 60% of industry volume, up from 35% a year ago.

Bernstein noted that Kalshi and Polymarket already process hundreds of billions in volume. Myriad appeared in the report with a prompt asking what the Federal Reserve will do with rates next and offering a click-to-predict option. Robinhood CEO Vlad Tenev is positioning for the same shift. He told CNBC this week that categories such as crypto are taking a disproportionate share and that he expects sports to become a minority category within a few years, similar to active trading at large.

Robinhood's event-contract business posted a tenfold revenue jump to $156 million in the second quarter of 2026. Bernstein has separately projected prediction markets to become a meaningful earner for Robinhood this year as crypto categories keep taking a larger share of the platform's trading. Industry-wide trading already grew from about $50 billion in 2025 to roughly $300 billion in the first eight months of 2026, and Bernstein expects volumes to compound at roughly 70% a year through 2035.

Legal Clarity Is the Bottleneck for 2027 or 2028

The key constraint is legal treatment. Bernstein said full US regulatory clarity for sports prediction markets is unlikely before 2027 or 2028, citing conflicting court rulings over whether these contracts are federally regulated derivatives or state-regulated gambling. Until that is resolved, the industry is on pace to close 2026 at $410 billion in volume, a number Bernstein treats as a floor, not a ceiling.

Bernstein's earlier April view had already emphasized institutional adoption. It projected the market would reach a comparatively modest $1 trillion by 2030 from $51 billion in 2025 and argued that growth would come less from bigger sports bets and more from institutions moving in. The firm said it expected an institutional market to develop around economics, business and political contracts as investors sought more direct and discrete exposure to events. It also described the plumbing behind the shift: increasing regulatory clarity at the federal level is expanding the addressable market, while blockchain-based tokenization and integration with crypto markets is enabling global liquidity, long-tail event creation and participation from institutions.

The newer forecast rests on a larger theoretical base. Bernstein estimates that crypto, stocks and commodities alone represent a $700 trillion pool of possible bets today, growing to $900 trillion by 2035. If prediction markets capture just 0.5% of that pool, the result is $4.7 trillion a year in volume from financial contracts alone, without counting a single sports wager. The original report appeared under the Daily Debrief Newsletter heading.