Wall Street giant Goldman Sachs Research predicts the market: Is a new trend emerging in the crypto industry?

Goldman Sachs CEO David Solomon explicitly stated during the Q4 earnings call on January 16th that the Wall Street giant is actively exploring prediction market opportunities and plans to enter the real-world event trading space.

Solomon described prediction markets as “very interesting” and personally met with the heads of the two largest prediction market companies in the past two weeks. The prominent Wall Street figure revealed that the Goldman Sachs team is engaging with these companies and conducting in-depth research.

01 Goldman Sachs' Strategic Moves

Goldman Sachs is intensively studying how to benefit from prediction markets. Solomon clearly stated during the call that prediction markets are becoming a key focus area for Goldman Sachs.

He specifically mentioned that he has personally met with the leaders of the two largest prediction market companies in the past two weeks and spent hours gaining a deep understanding of this field. Goldman Sachs has assembled a dedicated team to engage with these companies for thorough research.

The CEO also disclosed that Goldman Sachs is actively communicating with Washington policymakers, especially in the context of the Digital Asset Market Clarity Act.

02 What Are Prediction Markets?

Prediction markets are blockchain-based platforms that allow users to trade on the outcomes of real-world events, covering a wide range of topics from elections, cryptocurrency prices, sports events, to weather forecasts.

Unlike traditional centralized betting platforms, decentralized prediction markets offer on-chain transparency, self-custody of funds, and permissionless global access. As of October 2025, the total on-chain prediction market trading volume exceeded $2.6 billion, with over 180% year-over-year growth.

In the crypto space, prediction markets sit between derivatives markets, information markets, and social consensus mechanisms. They are particularly suitable for trading events closely watched by crypto traders, such as ETF approvals, protocol upgrades, governance votes, and regulatory actions.

03 Major Prediction Market Platforms

Polymarket has become the preferred platform for predicting cryptocurrency-related events, built on USDC settlement and automated market makers. The platform set a monthly record of approximately $1.43 billion in trading volume in September 2025.

Kalshi is the first CFTC-regulated event trading platform in the US, providing US users with a fully compliant way to trade on inflation data, Federal Reserve rate decisions, elections, and sports outcomes. The platform's monthly trading volume exceeded $1 billion in 2025.

Augur is one of the earliest decentralized prediction market protocols, operating entirely on smart contracts and decentralized oracle systems. Gnosis, on the other hand, is not a single consumer platform but provides infrastructure for numerous prediction markets, allowing outcomes to be represented as tradable, composable ERC-20 tokens.

04 Regulatory Environment and Market Outlook

Solomon remains cautiously optimistic about the development of prediction markets. He stated that while there is excitement about this technology, “the pace of change may not be as rapid and immediate as some experts suggest.”

The Digital Asset Market Clarity Act is becoming a focal point in the industry. Goldman Sachs analysts pointed out that improved regulatory clarity is a key driver for institutional adoption of cryptocurrencies.

Notably, some market-making firms have already joined the race. Mainstream Wall Street institutions entering prediction markets could enhance the legitimacy and trading volume of this relatively loosely regulated but thriving financial niche.

05 Impact on the Crypto Industry

The rise of prediction markets introduces a new growth dimension for the crypto industry. These platforms not only offer “betting” functions but also provide a way to present probabilities, with prices acting as continuously updated forecasts.

For traders, DAOs, and researchers, prediction markets offer a different signal layer, reflecting belief-weighted confidence rather than narrative momentum.

Solomon emphasized that Goldman Sachs is not only focused on prediction markets but is also closely monitoring adjacent crypto technologies like tokenization and stablecoins, with “a large number of employees very dedicated to these areas.”

This week, Morgan Stanley applied to create its own spot Bitcoin ETF and spot Solana ETF, potentially signaling that major global banks will further adopt cryptocurrencies.

Future Outlook

Solomon stated, “I do see opportunities where these prediction markets intersect with our business, and we are very focused on understanding this.” When asked whether these emerging technologies will eventually be integrated into Goldman Sachs' product lineup, he gave a clear response.

Wall Street financial giants are reassessing their relationship with the crypto industry. Goldman Sachs' strategic moves into prediction markets, alongside Morgan Stanley's application for a spot crypto ETF, together depict a picture of accelerating integration between traditional finance and the crypto world.

The investment bank is on the cusp of transformation, aiming to carve out a position in the rapidly evolving prediction market space. With the advancement of the Digital Asset Market Clarity Act and a gradually clearer regulatory environment, prediction markets could become a key bridge connecting traditional finance with the crypto ecosystem.