Prediction Market to Exceed $10 Trillion by 2035… Will Bitcoin Be the Biggest Beneficiary?

▲ Bitcoin (BTC)/AI generated image ©

The prediction market, which has grown to an annual size of $410 billion, is projected to exceed $10 trillion by 2035. While sports betting has driven market growth so far, an analysis suggests that in the future, financial assets such as virtual assets, including Bitcoin (BTC), stocks, and commodities, could emerge as the largest trading sector, changing the market landscape.

According to The Motley Fool, an investment media outlet, on September 29 (local time), a research team led by Bernstein analyst Gautam Chhugani projected that the prediction market's trading volume, estimated at $410 billion this year, will exceed $10 trillion by 2035. On platforms like Kalshi and Polymarket, users can trade on the outcomes of various events, from interest rate decisions and election results to sports matches and celebrity attendance at events.

In particular, trading related to financial markets, including virtual assets, is expected to drive future growth. Bernstein predicted that the share of prediction market trading related to financial assets such as virtual assets, stocks, and commodities will expand from 12% of the total in 2025 to approximately half by 2035, surpassing sports. Markets for directly trading single Key Performance Indicators (KPIs) such as corporate production volume, product delivery volume, and subscriber growth are emerging, and perpetual futures, which are active in virtual assets, are also expected to expand to commodities and individual stocks.

The trend of increasing virtual asset trading is already evident on major platforms. On Kalshi, the proportion of virtual asset-related trades surged from less than 5% of the total in January to approximately 20% in August. On Polymarket, virtual assets also accounted for 21% of the total trading volume. In particular, short-term contracts predicting which direction Bitcoin's price will move in the next 15 minutes are contributing to the increase in virtual asset-related trades. While sports-related trading increased, the proportion of political-related trading decreased.

The Motley Fool analyzed that while prediction markets compete with virtual assets for investors' speculative interest, they could also simultaneously expand interest in virtual assets themselves. Because virtual assets are more difficult to value and have higher price volatility than traditional stocks, many investors seek short-term upside potential, and prediction markets offer another trading avenue for this demand. Tom Anderson of consumer insights firm Langston explained that virtual asset investors' interest is more about short-term upside potential than long-term conviction in future currency, and prediction markets offer opportunities of a similar nature.

The outlet noted that as prediction markets expand into shorter and more granular financial events, such as Bitcoin's price in a few hours or 15 minutes, market interest in virtual assets could also grow. Given that the virtual asset market has historically been heavily influenced by sentiment and momentum, an analysis suggests that expanding prediction trading focused on short-term price movements could further strengthen these characteristics. Ultimately, if financial asset-related trading accounts for nearly half of the prediction market by 2035, as Bernstein predicts, virtual assets could establish themselves as one of the main pillars of prediction market growth.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*