Rumors suggest "Castle Securities" may enter the prediction market!
President: But we're not interested in sports event contracts.

Citadel Securities CEO Jim Esposito said that in the future, it is absolutely possible to provide liquidity for prediction markets to help institutional investors hedge geopolitical risks.

Wall Street market-making giant “Citadel Securities” President Jim Esposito said that the company will be “absolutely likely” to provide liquidity for prediction markets in the future, but it is only not interested in sports event contracts.

Jim Esposito said on Thursday at the Semafor World Economic Summit held in Washington, D.C.: “We are very interested in event contracts. From an industry logic standpoint, this is very reasonable—institutional investors indeed have reasons to use these contracts to hedge various risks.”

As one of the world’s largest stock and options market makers, if Citadel Securities truly enters the fray, it will be able to effectively address the pain points of insufficient trading depth and lack of liquidity in prediction markets, and accommodate bigger-scale bets as the industry moves toward the mainstream. Jim Esposito said:

Will this market continue to expand and form a scale? I think it’s possible. As the market gradually grows stronger, will we continue to focus on it—even participate ourselves? Of course, it’s also possible.

According to a report released earlier this week by Bernstein, as funds rapidly rotate from the 2024 U.S. election cycle to contracts related to sports, crypto, the broader economy, and politics, prediction markets generated an astonishing trading volume of about $51 billion in 2025, more than triple that of the previous year.

Among them, the two leading prediction market platforms Kalshi and Polymarket have together reached $60 billion in trading volume so far this year. Analysts are optimistic, estimating that the total trading volume of prediction markets will top $240 billion in 2026, and that the compound annual growth rate (CAGR) over the next 5 years will be as high as 80%.

Bernstein even predicts that by 2030, the annual trading volume of prediction markets will surpass the $1 trillion mark. The firm believes that an increasingly clear regulatory environment, alliances with mainstream distribution channels, and structural liquidity that offers advantages over traditional gambling markets are key engines driving this surge.

In recent months, despite the growing scrutiny by U.S. state governments of prediction markets (especially sports event contracts), the U.S. Commodity Futures Trading Commission (CFTC) has taken a firm stance, claiming that it has “exclusive jurisdiction” over prediction markets and is actively working to set the rules for this increasingly growing industry.

Bernstein’s report pointed out that, thanks to the structural limitations of traditional online sports betting platforms and the fragmentation of regulations across states, sports event contracts currently dominate trading volume in prediction markets, with a market share of 62%.

However, Citadel Securities is not interested in sports event contracts. Jim Esposito said that for Wall Street investors, the influence of geopolitical events is increasing day by day, and prediction markets happen to serve as an excellent “hedging tool.” He cited the upcoming November U.S. midterm elections as an example, noting: “That will be a key event that triggers a major market earthquake, and it could pose extremely significant risks to investors’ portfolios.”

In fact, at present, a very large proportion of retail trades placed through mainstream brokerages such as Charles Schwab and Robinhood are executed and matched by Citadel Securities; and Robinhood has recently also formally begun offering prediction market services to users by integrating the Kalshi platform. Jim Esposito said that as retail enthusiasm for prediction markets continues to heat up, “this trend is very likely to push us into the game as well.”

Jim Esposito concluded by saying that he is closely monitoring developments at Kalshi and other platforms, and described Kalshi founder Tarek Mansour as his “good buddy.” Notably, Citadel Securities CEO Peng Zhao personally participated last year in a Kalshi funding round totaling $185 million.

• This article is reprinted with permission from: 《BlockBeats》
• Original title: 《“Citadel Securities” Could Move Into Prediction Markets! President: But “Sports Event Contracts” Off the Table》
• Original author: BlockBeats’ MEL