Why might prediction markets become core financial infrastructure by 2026?
In this article, we will examine several key aspects of prediction markets from the perspective of crypto infrastructure, including their essence, why 2025 marked a turning point, the 'dual-core' market structure of Kalshi and Polymarket, and the structural changes in 2026 that are more noteworthy than simple growth.
Prediction markets are rapidly 'graduating'—in 2025, they crossed a real threshold.
Annual trading volume rose to over $50 billion, user participation significantly expanded, and the two leading platforms, Kalshi and Polymarket, gradually formed a 'dual-core' structure.
At the same time, regulatory signals in the United States are becoming clearer, institutional liquidity is beginning to enter, and global macro and political events continue to provide trading demand.
But as we move towards 2026, the most important change is not just 'increased trading volume.'
The real transformation lies in this point:
The prediction market is evolving from niche crypto products into a foundational layer of information and risk, beginning to present itself in the form of financial infrastructure.
They are shifting from 'betting on outcomes' to pricing uncertainty, and this pricing can be directly used by portfolios, corporate decisions, and even AI agents.
I | What exactly is the prediction market? Why is it not just gambling?
Essentially, the prediction market is a mechanism that aggregates dispersed information into tradable probabilities.
Participants buy and sell contracts based on judgments about future events, and prices form a continuously updated probability signal that reflects 'the market's belief in the likelihood of something happening.'
This structure brings three advantages that traditional polls or commentary systems find difficult to replace:
▪️Judgments with real costs: profits and losses directly reward accurate judgments while punishing arbitrary opinions
▪️Continuously updated: Prices adjust immediately as new information appears
▪️Reusable data outcomes: probability prices can be quoted, hedged, and embedded into strategies for actual decision-making
This is also why regulators and some institutional investors have begun to view compliant prediction markets as tools close to derivatives rather than entertainment products.
The market outputs not 'odds,' but probability prices that have external value.
II | Why 2025: The prediction market has structural feasibility
The explosion in 2025 is not a short-term fad but the result of multiple conditions maturing simultaneously.
The regulatory path is becoming clear
Especially in the United States, the compliance framework is gradually becoming predictable. The path represented by Kalshi has reduced legal uncertainty, allowing professional capital, market makers, and partners to participate formally.
Event supply is abundant, and uncertainty itself creates demand
The prediction market is most valuable during times of high uncertainty and significant events. The macro, political, and social events in 2025 are densely packed, perfectly matching the demand for 'pricing the future.'
Infrastructure and user experience have crossed a critical point
Execution costs have decreased, wallet experiences have improved, settlements are more reliable, and distributions are smoother, transforming prediction markets from geek products into near-consumer-grade financial tools, especially suitable for event-driven trading.
III | Dual-core structure: Kalshi and Polymarket are establishing different 'default paths'
By the end of 2025, the prediction market is gradually presenting a dual-core pattern:
▪️Kalshi: Compliance-oriented, close to traditional finance, standardized contracts, more suitable for institutional and compliant capital inflows
▪️Polymarket: Crypto-native, fewer permissions, on-chain settlement, closer to internet culture and narratives
It is worth noting that the directions of both are converging.
Compliant platforms are beginning to explore tokenization and on-chain settlement, while crypto platforms are also advancing more controllable compliance entry points.
The ultimate form is likely to be a hybrid model that combines institutional trust with open network innovation.
IV | Four truly important changes in 2026
If 2025 addresses 'can it be used,' 2026 will address 'can it become infrastructure.'
1) The prediction market begins to become a true category of derivatives
The next phase of growth will not come from curiosity-driven events but from the deep integration of risk management, such as:
Stock event contracts (earnings reports, guidance, corporate actions)
Macroeconomic data (CPI, interest rate decisions, recession probabilities)
Cross-asset relative performance and conditional trends
For many users, a simple binary contract may be clearer than a complex options structure. This is precisely the path that the prediction market takes from 'application' to 'financial primitives.'
2) AI enters the prediction market, becoming part of the system
In 2026, AI is likely to participate in the prediction market at multiple levels:
Information collection and organization
Cross-platform arbitrage and market-making
Auxiliary oracles and settlement
More critically, the prediction market prices themselves may become the native input for AI agents, serving as a real-time 'consensus probability layer' to help AI decide the next course of action.
3) Liquidity further concentrates, winner effects strengthen
The prediction market is essentially a liquidity business.
Once compliance, data interfaces, and distribution channels become important, trading volume naturally concentrates on a few platforms.
What we are more likely to see in 2026 is:
A few core platforms, surrounded by vertical scenarios, front-end products, and embedded applications, rather than a large number of dispersed homogeneous platforms.
4) Risks still exist, but this is precisely the hallmark of 'infrastructureization.'
Regulatory back-and-forth, insider information, manipulation risks, smart contract and oracle issues, and fragile business models continue to exist.
However, these are not signs of recession, but rather an indication that a field has begun to become important enough to be regulated, attacked, and competed over.
The future will be priced, not just predicted.
The core significance of the prediction market lies not in 'betting on news,' but in its provision of a mechanism: transforming dispersed judgments into tradable, quotable, actionable probabilities.
In a highly uncertain world, this continuously updated, incentive-constrained 'real price' is extremely scarce.
If 2025 proves that the prediction market can scale, then 2026 may be the year when they truly begin to operate like financial infrastructure.
The role they have been hinting at is becoming clear: the information layer of modern finance.
