Market Growth and Institutional Adoption

The popularity of prediction markets has surged dramatically in recent years, marked by exponential growth in trading volumes and expanding participation from major financial institutions. One leading US exchange saw its weekly trading volume exceed $1 billion in December 2025, up over 1,000% from 2024,³ and by May 2026 that figure had reached $4 billion.⁴ Another major platform, which operates an exchange regulated by the CFTC alongside its global platform, experienced a similarly dramatic trajectory, with weekly trading volume rising from approximately $50 million in June 2024 to $1.6 billion in May 2026, an increase of more than 30-fold.⁵

Exhibit 1 shows the top five platforms by monthly global volume in June 2024 and April 2026.⁶ Exhibit 2 shows the monthly volume breakdown by platform, both within and outside of the United States.

Exhibit 1: Top 5 Platforms by Monthly Global Volume in June 2024 and April 2026

Exhibit 2: Monthly Volume by Platform in April 2026, US and Non-US Platforms⁷

The growth in popularity is fueled in part by established trading platforms entering the space. Several major brokerages and cryptocurrency exchanges have launched prediction market hubs,⁸ formed partnerships with regulated exchanges,⁹^,¹⁰ acquired derivatives infrastructure, and developed their own prediction platforms, bringing prediction market access to millions of existing retail customers.

Wall Street’s interest has also intensified, with major proprietary trading firms establishing dedicated trading desks and the parent company of one of the nation’s largest stock exchanges investing $2 billion in a leading prediction market platform.¹¹ Other major exchanges are seeking regulatory approval to launch outcome-related options, and asset managers have filed for exchange-traded funds (ETFs) tied to prediction market contracts.¹² Taken together, this combination of volume growth, platform expansion, and institutional adoption signals that prediction markets are rapidly establishing themselves as a new asset class warranting increased attention from market participants.

One indicator of this trend is the expanding presence of contracts referencing publicly traded companies within these markets. We examined the percentage of companies in the S&P 500 that are referenced in event contracts listed on a leading prediction market platform between October 2, 2020 and May 18, 2026.¹³ During this period, there were 1,198,210 contracts listed, with 25,767 (2.15%) contracts referencing a total of 252 (50%) S&P 500 companies.¹⁴ In the first quarter of 2026 alone, 6,509 contracts referenced 163 different S&P 500 companies, compared to 149 contracts referencing 36 companies throughout 2024. This growing prevalence has implications for publicly traded companies, particularly around the timeliness and accuracy of information disclosed, engagement with investors and other market participants, and the potential for increased regulatory scrutiny.

As prediction markets expand their reach into events associated with publicly traded companies, firms are taking proactive steps to manage the associated risks. Companies are engaging experienced legal counsel to advise on regulatory structuring, contract listing considerations, potential disclosure obligations, and litigation risk, alongside economic experts to evaluate potential exposure to market manipulation. The CFTC has made clear that insider trading in prediction markets will be aggressively pursued, issuing an advisory in February 2026 affirming full authority to prosecute the misappropriation of material nonpublic information, and in April 2026, bringing its first insider case involving event contracts.¹⁵

In response, some companies are updating compliance policies to explicitly address prediction markets, implementing restricted lists and pre-clearance requirements for employee trading, and adopting surveillance tools to monitor for unusual trading patterns tied to corporate announcements.

A related question is how contracts referencing publicly traded companies should be characterized under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which assigns security-based swaps — generally those referencing a single security or issuer — to the Securities and Exchange Commission (SEC) and other swaps to the CFTC. Indeed, US Attorney Jay Clayton for the Southern District of New York recently cautioned that an event contract paying out if a stock falls below a certain price could closely resemble a security-based swap, raising questions about its classification under federal securities law.¹⁶