A significant shift may be underway in the world of prediction markets, as nearly half of all professional trading firms globally are now actively exploring them, a new industry report has found.
The study, from financial research firm Acuiti, reveals that these markets, which allow betting on everything from election results to pop culture events, are moving from a retail-dominated niche toward the institutional mainstream. In the United States, the trend is even more pronounced, with three-quarters of proprietary trading firms either already involved or considering it.
Read More: Prop Trading Community Is Evenly Divided on Whether 24/7 Trading Is a Good Idea — Report
According to the quarterly Acuiti report, one in ten professional trading firms currently trade on prediction markets, with another 35% actively weighing entry. This growing institutional attention could bring a new level of liquidity and volume to a sector once seen as a fringe activity.
Revenue Potential for Exchanges and Brokers
“Prediction markets are potentially on the cusp of significant institutional growth,” said Will Mitting, founder of Acuiti. He noted this would likely drive revenues for the exchanges and brokers offering these contracts.
However, the move presents unique challenges. The report highlights that risk management for these firms becomes exceptionally complex when dealing with speculative events.
“It is easy to see how a prop firm models where the price of gold or the S&P might be at the end of the day, or even the likely outcome of a sporting event, but how do you model the likely date of Taylor Swift’s wedding?,” Mitting explained.
The current players in this space are almost exclusively firms that use ultra-fast, algorithmic trading systems. Slower, manual trading operations have so far shown little interest, the report found.
Aleksey Larichev, CEO of Avelacom, which partnered on the report, said this reliance on speed means demand for low-latency infrastructure and colocation services is expected to grow. He added that “reliability and redundancy will become increasingly important” for firms managing these new risks.
Trading Firms Optimistic About 2026 Performance
Beyond prediction markets, the report painted a confident picture among trading firms, with over 70% expecting stronger-than-average performance in 2026. This optimism is leading many to increase their technology budgets for the coming year.
The report also touched on other regulatory developments, noting that firms remain cautious about entering the Indian market after recent charges against Jane Street by the country’s regulator. It also found U.K. firms are lobbying for lower capital requirements, and U.S. firms are adjusting hiring practices due to increased costs for specialist visas.
Read More: ONDO Price Prediction: Ondo Looks Ready for a Major Pullback
Disclaimer: The content presented herein is for informational purposes only. While efforts have been made to ensure the accuracy of the information, no guarantees are made regarding its completeness, reliability or suitability for any particular purpose. Before making any financial decisions, we strongly advise seeking guidance from a qualified professional.
