Prediction Markets Top $24 Billion in Volume as Retail Traders Flock to Binary Bets
Updated
Updated · CNBC · May 14
Prediction Markets Top $24 Billion in Volume as Retail Traders Flock to Binary Bets
6 articles · Updated · CNBC · May 14
$24 billion in notional volume had accumulated on Kalshi and Polymarket by April, up from less than $5 billion a year earlier, as prediction markets drew a wave of retail interest.
Barclays said the surge accelerated after the 2024 U.S. presidential election and reflects demand for accessible, binary-outcome trading across a wide range of events, especially sports and other non-economic contracts.
That growth puts prediction markets close to leveraged ETFs and call-overwrite strategies in monthly notional volume, though still far behind the flagship retail derivatives trade: S&P 500 0DTE options, which reached nearly $57 trillion in March.
Younger users appear to be a key driver: a Northwestern Mutual study found nearly one-third of Gen Z and almost one-quarter of millennials are placing money into prediction markets or sports betting, or considering doing so.
Will Wall Street's entry transform prediction markets from a retail 'toy' into a serious economic forecasting tool?
As regulators race to catch up, will new rules stifle the innovation driving prediction markets' explosive growth?
With the first insider trading case, are prediction markets the new frontier for illegal profits from secret information?