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Prediction markets will continue to grow at a fast clip and their trading volumes are likely to reach $1 trillion U.S. per year by 2030, according to Wall Street brokerage Bernstein.

Analysts at Bernstein say prediction markets will grow in popularity as the sector evolves from niche wagering into broad-based markets that cover sports, crypto, politics, and the economy.

The forecasted growth would be exponential given that trading volumes on platforms such as Kalshi and Polymarket totaled $51 billion U.S. last year.

Bernstein says that trading volumes on the largest prediction market sites are on pace to reach $240 billion U.S. this year, implying an 80% compound annual growth rate (CAGR).

Already this year, Polymarket and Kalshi have recorded combined year-to-date trading volumes of $60 billion U.S.

"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," wrote Bernstein in its outlook.

Prediction markets have surged in popularity since the 2024 U.S. presidential election, enabling Polymarket and Kalshi to expand access beyond politics into sports, crypto and economics.

Betting on the outcome of sports events currently accounts for about 62% of trading volumes on prediction markets, followed by geopolitical events such as elections and wars.

Bernstein estimates that industry revenues could grow from roughly $400 million U.S. in 2025 to $2.5 billion U.S. this year and $10.8 billion U.S. by 2030.

However, prediction markets have drawn controversy, with critics accusing them of encouraging gambling.

Several U.S. states have taken legal action against Polymarket and Kalshi, accusing them of running illegal gambling operations in their jurisdictions.

Bernstein is privately held and its stock doesn't trade on a public exchange.