Prediction Markets Post Fast Growth To $30B, With A1 Research Citing Clear Path To Multi‑Sector Expansion
In Brief
Prediction markets’ fast expansion has prompted A1 Research to project a potential long‑term market size approaching $1 trillion, driven by accelerating volumes, institutional adoption, and emerging cross‑sector use cases.
A1 Research, a crypto‑native analytics firm, has published a new report named “Prediction Markets: The Path to $1 Trillion and What Needs to Happen Next” examining the fast expansion of prediction markets, outlining the sector’s accelerating growth, the underlying infrastructure developments, and the challenges that may shape its next stage.
The study highlights that prediction markets have expanded from a valuation of $5 billion to $30 billion within a single year, marking one of the most large increases recorded in the sector. According to the report, the central question is no longer whether prediction markets will continue to grow, but rather the pace at which the expansion will occur and the potential upper limit of the market.
The analysis presents a projected path toward a $1 trillion market size across categories such as sports, financial hedging, and emerging use cases, while also identifying the infrastructure gaps that must be addressed for the sector to reach that scale.
A1 Research highlights that total trading volume in prediction markets rose from approximately $5 billion in 2024 to nearly $28–30 billion in 2025, marking one of the fastest year‑over‑year increases recorded in the industry. Early 2026 data shows annualized volumes of $43 billion on Kalshi and $38 billion on Polymarket, with weekly activity consistently ranging between $3.8 billion and $5.3 billion. Combined platform valuations now stand at roughly $20 billion.
The study attributes the initial surge in 2024 to the US presidential election cycle, which brought prediction markets into mainstream coverage and demonstrated their ability to scale. Institutional participation reinforced the trend, with Intercontinental Exchange investing $2 billion in Polymarket and major venture firms such as Sequoia Capital, a16z, and Paradigm expanding their exposure. Kalshi’s valuation climbed to $11 billion following a Series E round led by Sequoia, while Robinhood integrated Kalshi markets into its platform. Coinbase also strengthened its position by acquiring Deribit for $2.9 billion and launching its own US prediction market product.
Prediction Markets Seen On Path To $1T As New Trading Models And Cross‑Sector Growth Accelerate
The study further outlines a framework for how the sector could eventually reach $1 trillion in annual volume. It argues that prediction markets are positioned to capture portions of multiple existing industries rather than dominate a single one. Sports betting, which generates more than $125 billion in annual revenue globally, represents a large opportunity, with prediction markets potentially capturing 5–10% of digital volume in the near term and up to 20% over the next decade. Additional growth is expected from financial event‑driven hedging and emerging categories such as weather, geopolitical risk, and technology milestone markets.
The report notes that combining conservative capture rates across these verticals yields an estimated $85–90 billion in annual volume, while moderate assumptions and cross‑category products could push the figure toward $150–200 billion. The trillion‑dollar scenario, the researchers state, would require broader regulatory clarity, institutional adoption, or the emergence of a new breakout category.
The study also identifies several innovations driving the next phase of adoption. Kalshi’s introduction of combination markets, which surpassed $100 million in volume during their first week, reflects growing demand for more complex trading structures.
Meanwhile, new technical models aim to address the challenges of leverage in binary markets, including continuous settlement systems, short‑duration contracts, and outcome‑based trading primitives such as Hyperliquid’s HIP‑4.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
