Prediction-market platforms including Kalshi and Polymarket are seeking institutional investors and hedge funds to drive a new phase of growth [1, 2].
This shift represents a strategic move to move beyond retail users and tap into larger capital pools. By attracting large-block trades from financial institutions, these platforms aim to stabilize liquidity and increase the scale of their operations [2, 3].
The push for institutional capital comes amid aggressive growth forecasts for the sector. Analysts from Bernstein estimate that prediction markets could be worth $1 trillion by 2030 [4]. This projection is supported by an estimated compound annual growth rate of 80% between 2025 and 2030 [4].
Industry reports indicate that trading volume for 2026 is projected to reach $240 billion [4]. To capture this volume, platforms are positioning themselves as viable tools for sophisticated financial entities, not just casual bettors, to hedge risks or speculate on global events [1, 3].
The effort to attract institutional players is being coordinated across major financial hubs, including New York and Bengaluru [1]. By integrating hedge funds, these platforms can facilitate the high-volume transactions necessary to reach the trillion-dollar valuation target [1, 4].
While retail trading provided the initial spark for these markets, the transition to institutional block trading is viewed as the necessary step for the industry to mature into a recognized financial asset class [2, 3].
“Prediction markets could be worth $1 trillion by 2030.”
The transition from retail-centric to institutional-centric trading suggests that prediction markets are evolving from niche speculative tools into legitimate financial instruments. If hedge funds adopt these platforms for hedging and risk management, it could validate the accuracy of prediction markets as leading indicators for political and economic events, while significantly increasing the systemic liquidity of the sector.
