Bernstein Report: Prediction Markets Poised for Mainstream Breakout in 2025

Wall Street's latest darling isn't stocks or bonds—it's crystal balls. Bernstein's bombshell report suggests prediction markets are shedding their niche status faster than a VC dumps pre-IPO shares.

These once-fringe platforms—where users bet on everything from election outcomes to box office numbers—are now flirting with legitimacy. And by legitimacy, we mean institutional money finally found a speculative vehicle it can't resist.

The mechanics? Simple. Crowdsourced foresight meets blockchain transparency. The result? A self-fulfilling prophecy where the house always wins—but now with ISO compliance.

One hedge fund manager quipped: 'We'll trade volatility on anything except our own performance metrics.' The market may predict the future, but it'll never kill financial hypocrisy.

Kalshi and Polymarket drive the prediction market’s mainstream shift

Bernstein analysts revealed that Kalshi and Polymarket remain central players, becoming the first to MOVE prediction markets from low-popularity apps to accessible mainstream products. 

‘By letting markets decide probabilities for key events, more mainstream investors can factor these information signals in their portfolios,’ commented Bernstein analysts.

According to the experts, prediction markets may become a key gauge on social media, as an arbiter of truth. Political polarity and AI content have skewed influences on social media, and prediction markets can show a result closer to the truth, due to the requirement to pay for the predictive position. 

The two apps opened the door to other markets, with plans for launching predictions on crypto platforms like Coinbase. The Binance ecosystem has not yet picked a prediction market, though there are speculations of potentially picking a newly emerging prediction app.

Robinhood and Coinbase may tap trader base for predictions

Until recently, prediction market users were just one class of crypto traders. As many sources of growth in crypto stagnated, Robinhood and Coinbase may redirect their user base to predictions. The addition of prediction markets may also boost the stock outlook for HOOD to $160 and for COIN to $510. 

The two platforms may gain a first-mover advantage, while others, like Interactive Brokers, try to spread their native apps. Trum Media also plans to launch a prediction market and integrate it with the Truth Social platform. 

Kalshi and Polymarket are still leaders, but new prediction platforms are emerging, tapping demand for faster trading and immediate outcomes. | Source: Dune Analytics

Overall, prediction markets are moving away from fringe bets, making it acceptable to predict current events and even move into short-term predictions. The faster resolutions of a prediction market replaced uncertain bets on tokens or other assets, replacing them with more easily recognizable opportunities in news, sports, and short-term asset pricing. 

The biggest obstacle is the still relatively low volumes. While some topics go viral, even those markets are relatively illiquid. The life-changing fortunes of the US Presidential elections market are now in the past, leaving the platforms as a location for retail predictions and small-scale trading. 

Join Bybit now and claim a $50 bonus in minutes