Gate integrates with Polymarket; why are prediction markets becoming the core piece of financial infrastructure?

During the 2024 U.S. presidential election, trading volume on Polymarket and Kalshi experienced an explosive 3,186% growth over five months, soaring from $140 million to $4.6 billion. At that time, many believed it was just a short-term carnival driven by the election. However, two years later, data from prediction markets prove: this is not a fleeting fireworks display, but an infrastructure-level financial revolution.

Data Surge: $240 Billion Scale Validates “Financial Infrastructure” Status

Polymarket’s monthly trading volume jumped from approximately $1.2 billion in 2025 to over $20 billion in early 2026, with active wallets increasing more than threefold in half a year. By March 2026, the prediction market’s monthly trading volume had reached $25.7 billion.

More noteworthy is its structural shift. Users are moving from one-off election or sports bets to high-frequency trading around news, macro trends, and crypto asset outcomes. Messari data shows that Polymarket’s daily active users increased from 48,611 on election day to 78,909, and the proportion of non-political markets rose from 38% in 2024 to 80%. Prediction markets have successfully broken free from election-driven narratives and entered a diversified, steadily growing track.

Capital and Regulatory Double Confirmation: From “Gray Area” to “Federal Oversight”

The establishment of financial infrastructure relies on institutional recognition. In 2026, prediction markets experienced key turning points in both capital and regulation.

On the capital side, leading platforms’ valuations soared. By April 2026, Kalshi was valued at $22 billion, and Polymarket at $15 billion. On May 7, 2026, Kalshi officially completed a $1 billion Series F funding round led by Coatue Management, doubling its valuation in just five months since the last round, with top-tier firms like Sequoia Capital, a16z, and Paradigm participating.

On the regulatory front, the situation became clearer. On May 12, 2026, the CFTC explicitly stated in a court amicus brief that event contracts on platforms like Kalshi are classified as federally regulated swaps, not state-level gambling products, and the CFTC has exclusive jurisdiction over them. Previously, the CFTC enforcement had formally prioritized insider trading among its five main enforcement areas for prediction markets. Bernstein, an investment research firm, explicitly pointed out in a recent report that clearer federal regulation is one of the three core structural factors driving industry growth. When regulators define prediction markets as “federally overseen” rather than “state-licensed gambling,” their status as financial infrastructure is institutionally confirmed.

From Speculation to Insurance: The Real Economic Value of Prediction Markets

The core feature of financial infrastructure is its ability to serve real needs in the real economy, not just speculation. Prediction markets are demonstrating this trait.

In risk hedging, prediction markets are being used by enterprises to manage risks that are difficult for traditional insurance to cover, such as natural disasters and policy changes. For example, ForecastEx allows institutions to purchase hurricane landing contracts, providing a payout mechanism similar to parametric insurance, directly hedging financial losses. This operation is fundamentally different from gambling—companies are not betting on whether a storm will occur but managing their existing risk exposure.

In information pricing, prediction markets offer a new decentralized intelligence system. Market prices reflect the collective judgment of the group on the probability of future events, providing real-time risk indicators for decision-making. Bayes Market’s concept of “turning cognition into tradable assets” vividly illustrates this logic.

Trillion-Dollar Track: Accelerating in 2026, Targeting $1 Trillion by 2030

Bernstein analyst Gautam Chhugani predicts that the total trading volume of prediction markets will reach $240 billion in 2026, a 370% increase over 2025. Assuming an approximate 80% compound annual growth rate, the market size could surpass $1 trillion by 2030. Industry revenue is expected to expand from about $400 million in 2025 to $2.5 billion in 2026, and reach $10.8 billion by 2030.

The three main drivers of this growth are: clearer federal regulation, mainstream distribution partnerships (such as Robinhood integrating with Kalshi), and the global liquidity revolution brought by blockchain tokenization technology. While sports contracts currently dominate trading volume, Chhugani expects their share to halve by 2030, with incremental growth coming from institutional hedging of corporate economic events, political shifts, and macroeconomic indicators. The narrative of prediction markets is shifting from “retail speculative tools” to “institutional risk management weapons.”

Summary

Prediction markets are becoming an indispensable infrastructure in the financial world, supported by a clear logical chain: election cycles demonstrate their unique value as a “price discovery layer” for social sentiment; diversified non-political markets break through event-driven bottlenecks and move toward structural growth; the CFTC’s clarification of their derivative nature at the federal level paves the way for compliance and scale expansion; leading platforms raising nearly a billion dollars and reaching valuations in the hundreds of billions validate long-term investor confidence; and enterprise risk hedging applications endow this tool with real economic value. When information can be priced, traded, and used for hedging, prediction markets are no longer “marginal tools” but a new pillar of financial infrastructure. As a leading global crypto trading platform, Gate will continue to monitor the development of prediction markets, providing users with the latest industry insights and trading opportunities.