Prediction markets are no longer a niche experiment tied to elections or crypto-native communities. Over the past 12–18 months, they have evolved into a rapidly expanding segment that increasingly resembles a hybrid between financial markets, trading platforms, and online gambling. What is emerging is not just a new product category, but a structural shift in how users engage with uncertainty, speculation, and information.
At the center of this transformation is a surge in participation, driven largely by retail users and amplified by social media. According to the Financial Times, nearly a third of young US investors are either participating in or considering prediction markets, highlighting how quickly the category has entered mainstream awareness. What began as a niche product has, in a very short time, become part of a broader cultural and financial trend.
The Scale of Growth — A Market Expanding at Speed
The numbers behind this shift reinforce just how fast the space is moving:
- Prediction market volume reached ~$64 billion in 2025, up sharply year-over-year (Yahoo Finance)
- Monthly trading surged from sub-$100 million in early 2024 to over $20B+ in 2026 (TRM Labs)
- The market is projected to reach $240B–$325B annually in the near term, with long-term upside toward $1 trillion (Seeking Alpha / Bernstein)
- In the US, Kalshi alone controls ~89% of regulated prediction market activity (CoinDesk)
Taken together, these figures point to one of the fastest-growing verticals across both fintech and iGaming. Importantly, this is not just speculative hype — it is sustained growth driven by product-market fit, distribution, and a new type of user behavior.
Measuring Market Power: BAP, YoY, and MoM
To understand how this growth is distributed, Blask’s dataset provides a useful framework. Rather than focusing purely on volume, it tracks user interest and market share dynamics through three key metrics:
- Brand’s Accumulated Power (BAP): share of total user attention
- Year-over-Year (YoY): structural growth over time
- Month-over-Month (MoM): short-term momentum shifts
This approach offers a more nuanced view of competitive positioning, particularly in fast-moving markets where attention often precedes revenue.
The US Prediction Market Landscape
| Brand | BAP | YoY Growth | MoM Growth |
|---|---|---|---|
| Polymarket | 71.98% | -10.78% | +19.29% |
| Kalshi | 23.93% | +115.5% | +6.26% |
| Myriad | 1.63% | -1.03% | -6.17% |
| Manifold | 1.10% | -2.41% | +14.20% |
| PredictIt | 0.42% | -88.92% | +55.07% |
| Robinhood | 0.28% | +983.4% | +1.94% |
| Novig | 0.22% | N/A | +45.22% |
| FanDuel | 0.11% | N/A | +398.3% |
| Crypto.com | 0.07% | +47.78% | -53.89% |
| DraftKings | 0.07% | N/A | -42.04% |
Source: Blask US Prediction Markets dataset
The structure is highly concentrated. Polymarket alone commands nearly 72% of total user interest, making it the clear market leader. However, its slight YoY decline suggests that while it remains dominant, competitive pressure is increasing.
Kalshi is the most important challenger. With over 115% YoY growth, it is scaling rapidly and benefiting from its regulated positioning in the US. This aligns with broader industry observations that regulated environments are beginning to attract both retail and institutional participants.
A Split Market: Crypto Liquidity vs Regulation
What is emerging is not a simple leader-versus-challenger dynamic, but a dual-market structure.
Polymarket operates as a crypto-native platform with global access, deep liquidity, and fewer barriers to entry. Its growth has been fueled by viral markets, international participation, and a product experience that feels closer to trading than traditional betting.
Kalshi, by contrast, is positioning itself as a regulated exchange. Its appeal lies in compliance, transparency, and integration into the US financial system. Rather than replacing Polymarket, it is building a parallel ecosystem that may ultimately prove more sustainable in the long term.
This divide reflects a broader tension in the industry: scale versus regulation.
Retail Participation — and the Emergence of “Dumb Money”
The rapid growth of prediction markets has been driven by retail users, but this has also introduced structural imbalances. According to the Financial Times, a majority of participants on platforms like Polymarket are unprofitable, with 58% of wallets in the red . Even more striking, a disproportionate share of profits is concentrated among a small number of accounts.
This dynamic mirrors traditional financial markets, where inexperienced traders often provide liquidity for more sophisticated players. In prediction markets, however, the effect may be even more pronounced due to the nature of the products.
As the FT notes, users are not just competing against each other — they are increasingly trading against professional firms, algorithmic strategies, and even AI-powered tools . The result is a market where information asymmetry plays a central role, and where casual participants risk becoming what traders refer to as “dumb money”.
Convergence: Where iGaming Meets Financial Markets
One of the most telling signals in the Blask data is not just who leads the market, but who is entering it.
The presence of brands like FanDuel, DraftKings, Robinhood, and Crypto.com points to a broader convergence across industries. These companies represent different verticals — sports betting, retail trading, and crypto — yet they are all moving toward the same space.
This suggests that prediction markets are becoming a convergence layer:
- For sportsbooks, they offer new event-driven betting formats
- For trading platforms, they introduce retail-friendly derivatives
- For crypto companies, they provide high-engagement use cases for liquidity
FanDuel’s nearly 400% MoM growth, even from a small base, highlights how quickly established operators can gain traction once they enter the space. Similarly, Robinhood’s explosive YoY growth suggests that mainstream adoption may not be far off.
Momentum Beneath the Surface
While the headline narrative is dominated by Polymarket and Kalshi, the underlying data reveals a more dynamic picture.
Kalshi’s rapid expansion indicates that regulated markets are gaining legitimacy and traction. At the same time, smaller platforms and new entrants are showing strong short-term momentum, suggesting that the competitive landscape is still evolving.
This points to a market that is entering its next phase — one defined not just by growth, but by redistribution of attention and market share.
A Market at an Inflection Point
Prediction markets are transitioning from experimentation to institutionalization. The initial phase, driven by crypto-native users, has given way to a broader retail boom. The next stage is likely to involve deeper integration with financial systems, increased regulatory scrutiny, and greater participation from established operators.
At the same time, risks are becoming more visible. Concerns around insider trading, market manipulation, and information asymmetry are already emerging, particularly as these platforms expand into more sensitive and high-stakes markets.
As highlighted in the Financial Times, prediction markets are increasingly positioned as tools for aggregating information and forecasting outcomes. Yet they remain fundamentally zero-sum environments, where gains for some come at the expense of others .
Conclusion
Prediction markets are no longer just about betting on the future — they are becoming a way to trade it.
The combination of rapid growth, retail participation, and cross-industry convergence is creating a market that sits at the intersection of finance, gambling, and media. For stakeholders across iGaming, fintech, and crypto, this is not a peripheral trend.
It is a signal of where the industry is heading next.
