Prediction markets evolving into institutional products, Bernstein says

Prediction markets are evolving from speculative platforms for retail investors into institutional-grade financial products, according to a report from U.S. investment bank Bernstein. The report noted that institutional investors are increasingly drawn to these markets because they offer a way to hedge specific event risks—such as tariffs, elections, and geopolitical shifts—through simple yes-or-no contracts. Bernstein highlighted a recent, first-of-its-kind custom institutional block trade on Kalshi as a significant milestone. The introduction of block trades, which are typically large and privately negotiated between institutional investors, and custom contracts could expand participation from investors seeking targeted exposure to specific event risks, the report explained.