Will prediction markets become a financial infrastructure? An in-depth industry analysis for 2026

Prediction markets are undergoing a profound transformation of identity. This ancient wisdom, born from tavern bets in antiquity, is now quietly approaching a critical question driven by cryptography: will it become an indispensable infrastructure of the modern financial system, like stock exchanges and futures markets, with billions of dollars in monthly trading volume, a platform valuation exceeding $15B , and systematic attention from top regulators?

Explosive Growth: Data Is Redefining the Rules of the Game

According to Dune Analytics data, the global prediction market’s monthly trading volume reached approximately 192837465657483.91T USD in March 2026, a growth of over 2,800% compared to the same period in 2025. Leading industry platform Polymarket’s annualized trading volume has surpassed $100 billion, with total trading in the first quarter of 2026 around 192837465657483.91T USD, an increase of over 90% from the previous quarter. Analysts project that the total trading volume of prediction markets in 2026 will reach $240 billion USD, and with an approximate 80% annual compound growth rate, the next decade will see it surpass $239 trillion USD.

Polymarket’s independent wallet count has nearly tripled in six months, reaching 840k, with growth mainly driven by new users rather than existing users increasing their activity. In the first quarter of 2026, Polymarket topped the crypto app website traffic rankings with 122 million visits, surpassing Robinhood and Coinbase.

Not only native crypto products, but veteran Wall Street players are also accelerating their entry. Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, invested $262 funds into Polymarket, pushing its total valuation to $15 billion; its main competitor Kalshi is valued at $22 billion. Nasdaq has explicitly announced plans to launch binary options contracts based on the Nasdaq 100, and Cboe and CME Group are also developing their own “event products.”

$1 Institutional Entry: A Fundamental Shift from “Gambling” to “Hedging”

Behind the market capitalization and user growth is a fundamental change in use cases.

Macro hedge funds are beginning to embed prediction markets directly into their information intelligence systems and risk hedging frameworks. According to research by Coalition Greenwich, 43% of buy-side and sell-side institutions admit to using prediction market data for investment decisions. Institutions no longer see it merely as a poll-like reference but as a “real-time public opinion price indicator” that can hedge macro risks.

A joint report by Keyrock, a subsidiary of Huatai Securities, and research firm Dune points out that private equity funds can use the market to establish inverse positions on the “probability of first-day price drops” before tech IPOs, while macro hedge funds can directly target specific events like “Federal Reserve raising interest rates by 75 basis points,” without needing to hedge through related assets. This ability to directly price future uncertainties in the real world gives prediction markets a unique value that traditional derivatives lack.

$600M Regulatory Game: Ownership Boundaries Will Set the Ceiling

However, a prerequisite for becoming a core financial infrastructure is compliance. In the United States, a high-stakes regulatory game over jurisdiction is unfolding. As of April 2026, Kalshi, licensed by the CFTC, accounts for 89% of trading volume in the U.S. prediction market, while Polymarket remains heavily restricted due to compliance barriers.

The CFTC has repeatedly acted in recent months, attempting to establish itself as the exclusive regulator of “event contracts,” and in April 2026, it began prosecuting jurisdictions like New York that try to block the market through state-level gambling laws. CFTC Chairman Michael S. Selig explicitly stated at a congressional hearing that the commission has adopted a “zero-tolerance policy” against fraud, market manipulation, and insider trading, and has released detailed insider trading rules for 2026. The outcome of this game will largely determine the speed and path of prediction markets becoming mainstream.

Summary

With liquidity continuously flowing in, regulatory frameworks gradually clarifying, and institutional awareness deepening, prediction markets are on a key path to becoming a financial infrastructure. In the future division of the financial system, prediction markets are likely to serve as a “pricing system” connecting retail investors and institutions, aggregating global wisdom and confidence, just like today’s stocks, bonds, futures, and options—becoming an indispensable component of the financial markets.

Prediction markets are evolving toward the goal of “financial infrastructure” with astonishing data growth and profound underlying paradigm shifts. In spring 2026, record-breaking monthly trading volumes, Wall Street giants investing heavily, and initial regulatory battles hinting at the future, all indicate that prediction markets have moved beyond the “niche crypto play” stage. Perhaps they will become the essential “information engine” of the future financial world.