Growth, Retention, Accuracy: New Report Paints Bullish Future for Prediction Markets

A new report paints an increasingly bullish picture for the prediction market industry, highlighting the accuracy, utility, and rapid adoption of the nascent financial instruments.

Notional volume has grown from under $100 million to over $13 billion, a 130× increase over the last year, according to a comprehensive 75-page research report published by crypto market maker Keyrock in collaboration with the onchain data analytics platform Dune.

During that same period, “total transactions surged from roughly 240,000 to more than 43 million (180×), while monthly active users expanded from approximately 4,000 to over 612,000 (150×).”

The report was authored by Amir Hajian and Filippo Armani, with contributions from over 10 industry leaders including Kalshi, Polymarket, and Crypto.com.

Interestingly, for crypto enthusiasts, Polymarket has become one of the most successful blockchain-based projects in terms of user retention, outperforming 85% of crypto protocols across more than 275 projects sampled by the study.

Prediction markets capture the news cycle

The high retention is driven by the stickiness of the 24/7 news cycle, which constantly spurs new tradable markets around global events, including politics and major pop culture moments.

Unlike traditional DeFi protocols where users may only interact to swap a token, prediction markets provide a constant stream of new, relevant questions to answer.

They also offer recurring utility as both a sentiment gauge and a hedging tool for real-world events. The former is why Polymarket’s site has received heavy traffic from non-traders who are simply looking for unbiased forecasts for pressing questions such as will the U.S. engage militarily with Venezuela and when?

November stats 🧗 pic.twitter.com/W6BxUcVDui

— Shayne Coplan 🦅 (@shayne_coplan) December 9, 2025

This surge in interest has sparked a crypto wave, so to speak, toward event contracts. Major players are moving fast in hopes of capturing market share: Gemini recently launched its own prediction platform just this week, Crypto.com has integrated event trading into its multi-financial app, and Coinbase is partnering with Kalshi to launch prediction markets as part of its “everything app.”

Event contracts are proving their worth

Most importantly, however, the report suggests prediction markets are proving useful as accurate forecasting tools that are becoming leading macro indicators and important hedging tools.

“They are the most accurate forecasting systems we have,” Hajian and Armani wrote, pointing toward the Brier scores as evidence.

A Brier score is a statistical measure used to evaluate the accuracy of probabilistic forecasts.

The study shows that prediction markets consistently earn Brier scores near 0.09, more accurate than everything from weather forecasting, experts, and polls.

Notably, Kalshi is more accurate than Polymarket. The difference can be attributed to Kalshi’s regulated contracts, which are more structured and defined than Polymarket’s “broader and more diverse market design,” the latter of which has resulted in a higher variance of outcomes relative to their respective market forecasts.

The broader accuracy of prediction markets, or the “wisdom of the crowd,” is why they are quickly becoming leading macro indicators, moving first and anticipating major shifts before other institutions.

The report specifically highlights how prediction markets outperformed reactive models like the Cleveland FedNow and the CME FedWatch tool in anticipating Consumer Price Index (CPI) releases. According to the data, the Cleveland FedNow model was 4.3x more volatile than Kalshi’s inflation market, which provided a much more stable and accurate real-time signal of inflation expectations before official government data was even released.

What’s in store for prediction markets in 2026?

2024 and 2025 were huge years for prediction markets, and the stage is setting for 2026 to be even bigger.

As already mentioned, prediction markets will soon be available on Coinbase. Meanwhile, sportsbook operators on DraftKings and FanDuel will launch their own prediction market products, which will be available throughout most of the country.

While sports event contracts have provided much of the volume on U.S. exchanges like Kalshi, the U.S. midterms in 2026 will provide fuel for political trading as primaries heat up in the spring, building momentum toward November’s general election that will feature hundreds of races across the country.

Prediction market platforms are forming partnerships with major news organizations to integrate their prediction data and graphics on screen. So far, Kalshi has inked deals with CNN and CNBC, and CNN is already citing Kalshi’s odds in its political coverage. Galactic, a relatively unknown platform, has partnered with TIME. Meanwhile, Polymarket has teamed with Yahoo Finance, and more deals between now and election season are undoubtedly on the way.

Kalshi x CNN is official.

“Pretty insane. What a win for Kalshi” pic.twitter.com/SNkcBn02qp

— The Rollup (@therollupco) December 3, 2025

All of that to say, there is reason to believe we are in fact still early in the so-called “prediction market super cycle,”  and that 2026 is the year prediction markets become more than simply something to trade.

As the Keyrock report concludes:

“What feels novel today may soon become routine. When checking the odds becomes as natural as checking headlines, prediction markets will have reshaped how uncertainty is priced, understood, and acted upon.”