On February 25, a report released by Citizens, a U.S. banking institution, projected that prediction market annualized revenue has increased from approximately $2 billion last December to over $3 billion, with expectations of reaching $10 billion by 2030. Analysts attribute this acceleration to sustained trading volume growth, structural market maturation, and early institutional capital participation—paralleling the early development trajectories of listed derivatives and digital assets.
Prediction markets have evolved from niche betting platforms into complex financial ecosystems centered on probability-based trading of real-world events. Leading platforms include Kalshi, regulated by the U.S. Commodity Futures Trading Commission (CFTC), and Polymarket, which covers political, sports, and macroeconomic events. These platforms are increasingly drawing attention from mainstream financial institutions and regulators.
The report indicates that January trading volume grew more than 40% month-over-month, with February maintaining a similar growth pace. While sports events remain a primary source of liquidity, market coverage is rapidly expanding into macroeconomic policy, inflation expectations, and regulatory approvals. Such discrete-event risk scenarios are particularly attractive to institutional investors seeking targeted hedging strategies.
By isolating specific outcomes, prediction markets provide precise risk transfer mechanisms and real-time capital-weighted probability signals, reducing reliance on traditional instruments such as index futures or options and mitigating basis risk exposure.
However, as transaction scale expands and cross-border participation increases, compliance and fund transparency have become critical concerns. Prediction markets inherently connect real-world events with on-chain capital flows. Without effective monitoring frameworks, platforms may face risks including money laundering, market manipulation, and abnormal capital inflows.
Establishing a robust on-chain monitoring and KYT (Know Your Transaction) framework is therefore becoming essential industry infrastructure. By leveraging professional blockchain risk intelligence systems such as Trustformer KYT, platforms can conduct real-time monitoring of large abnormal transactions, circular fund routing patterns, and high-risk address interactions, enabling early detection of potential violations.
As prediction markets move toward greater institutionalization, transparent fund pathways and auditable transaction records will be prerequisites for regulatory recognition and institutional trust.
Looking ahead, analysts expect revenue models to diversify beyond transaction fees into data services, research analytics, and financing support. Yet regardless of business model evolution, underlying security architecture and compliance capability remain foundational pillars for sustainable growth.
By integrating advanced on-chain monitoring solutions like Trustformer KYT, prediction market platforms can balance rapid expansion with resilient risk governance. In this new phase of capital acceleration, the sector represents not only a frontier of financial innovation, but also a test of transparency and risk management capacity. Those capable of balancing growth with compliance will be best positioned to lead a market potentially exceeding $10 billion by 2030.