Prediction Markets See Significant Growth, Rivaling Leveraged ETPs

Barclays analysts have highlighted that prediction markets are posing a threat to other speculative investment tools and have become strong competitors to leveraged ETPs. According to Odaily, data shows that since the 2024 U.S. presidential election, the nominal trading volume on prediction platforms has been steadily increasing. In April, platforms like Kalshi and Polymarket reported nominal trading volumes exceeding $24 billion, nearly matching the scale of 'buy-write strategies' for indices and individual stocks. A year ago, this figure was only $5 billion. The analysis suggests that the surge in prediction markets is not driven by an AI bubble but rather by viral growth among younger generations. Nearly one-third of Generation Z and the next generation of millennials are either participating in or considering engaging in prediction markets and sports betting. However, prediction markets currently struggle to compete with flagship retail products like 0DTE, with the S&P 0DTE market reaching a total trading volume of $57 trillion in March this year.