Goldman Sachs (GS) Enters Prediction Markets: Strategic Analysis and Industry Impact Assessment

Based on collected data and market information, I will provide you with an in-depth analysis report on Goldman Sachs’ entry into prediction markets.

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Goldman Sachs delivered a strong performance in Q4 2025, with its stock closing at $962.00. The current stock price has risen 51.56% year-to-date, and soared 174.27% over the past year [0]. The company’s Q4 2025 earnings per share (EPS) was $14.01, beating market expectations by 19.74%, although revenue fell slightly short of expectations [0]. In terms of equity underwriting, Goldman Sachs reclaimed the top spot on Wall Street with quarterly revenue of $521 million, surpassing Morgan Stanley ($494 million) and JPMorgan Chase ($416 million) [1].

Against this backdrop, Goldman Sachs CEO David Solomon announced on the earnings call that the company is considering entering the prediction markets space. Over the past two weeks, he personally held in-depth discussions with senior executives of two major prediction market platforms, Polymarket and Kalshi, with each meeting lasting several hours [1][2]. Solomon clearly stated: “We have a team here that is spending time working with them and diving into researching this space” [2].

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The prediction markets industry is experiencing unprecedented explosive growth. In Q4 2025, the industry’s monthly trading volume approached $10 billion, far exceeding the 2024 peak. Weekly trading volume reached $3.8 billion in December, representing a year-to-date increase of approximately 660% [3]. Details are as follows:

Platform	Key Metrics	Competitive Advantages
Polymarket	2025 cumulative trading volume exceeding $13 billion, November monthly trading volume of approximately $4 billion	Decentralized infrastructure, received $2 billion investment from ICE, valuation of $8-9 billion
Kalshi	November trading volume of $5.2 billion, annualized trading volume of $70 billion	First prediction market platform fully regulated by the CFTC, valuation of $11 billion

Sports betting has become the main driver of prediction markets, accounting for over 40% of volume on Polymarket and over 90% on Kalshi [3]. The sports betting market is projected to grow from approximately $108 billion in 2024 to $198 billion by 2030, representing a compound annual growth rate (CAGR) of 10% [3].

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Solomon drew an analogy between prediction markets and derivatives markets, pointing out significant business crossover opportunities between the two [2]. The core of prediction markets—binary option contracts—highly aligns with Goldman Sachs’ existing derivatives business, allowing the firm to quickly migrate its core capabilities in structured products, risk management, and trade execution to this new space.

Goldman Sachs has clearly identified cryptocurrencies, tokenization, and prediction markets as three key growth areas [2]. Solomon stated: “These are all areas that have a lot of people in our firm paying close attention: tokenization, stablecoins.” This indicates that Goldman Sachs is actively laying out next-generation financial infrastructure to hedge against the cyclical volatility risks of traditional investment banking businesses.

Prediction markets have attracted a large number of retail and institutional investors, especially the younger generation. If Goldman Sachs enters this space, it will significantly expand its customer reach and provide more diversified risk management tools for its traditional clients.

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Goldman Sachs’ entry will directly challenge the position of Robinhood Markets (HOOD.US) in this space. Following the announcement, Robinhood’s stock price plummeted 7.79% on the same day [1]. As one of Wall Street’s largest investment banks, Goldman Sachs has significant advantages in brand reputation, regulatory compliance capabilities, and institutional resources, which may accelerate the increase in industry concentration.

Goldman Sachs has long been known for its strict compliance system, and its entry will promote the standardized development of the prediction markets industry. Solomon emphasized the importance of regulation, stating that prediction market contracts need to be regulated by the CFTC [1]. Goldman Sachs maintains close communication with policymakers in Washington and participates in the discussion framework of the Clarity Act [2].

Intercontinental Exchange (ICE) invested $2 billion in Polymarket in October 2025 to promote the integration of its data into traditional financial infrastructure [3]. Goldman Sachs’ entry will further accelerate this integration trend, moving prediction markets from niche products to the mainstream financial ecosystem.

Prediction markets provide a unique “event prediction” dimension for financial risk management. Institutional investors can use prediction markets to hedge against non-traditional risk exposures such as geopolitical and policy changes, which will enrich the risk management toolbox that Goldman Sachs offers to its institutional clients.

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Prediction markets face a complex regulatory environment. The Nevada Gaming Control Board has filed a lawsuit against Polymarket, accusing its sports prediction market of violating state gambling laws [4]. Kalshi is facing legal challenges in multiple states and is appealing to the Ninth Circuit Court [4]. Goldman Sachs will need to strike a balance between federal and state regulations.

The boundary between prediction markets and gambling activities is blurry, which may trigger public controversy over Goldman Sachs’ brand perception. As a benchmark institution on Wall Street, Goldman Sachs needs to carefully manage this potential reputational risk.

Polymarket and Kalshi have already established significant first-mover advantages and user bases. As a latecomer, Goldman Sachs will need to invest substantial resources to gain a competitive market share. Solomon also warned, “The pace of change may not be as fast and immediate as some experts suggest” [2].

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Goldman Sachs’ entry into prediction markets is a strategically forward-looking initiative, which may contribute limitedly in the short term but is expected to become a new profit growth driver in the medium to long term. Judging from the current market reaction, investors have a positive attitude toward this—Goldman Sachs’ stock price has risen by over 51% over the past year [0]. Analysts have given a consensus target price of $828, representing a downside of approximately 13.9% from the current price [0], reflecting the market’s cautious attitude toward valuation rationality.

• Growth in equity underwriting revenue from large IPO projects such as SpaceX and OpenAI in 2026
• Substantial progress in prediction markets business
• Breakthroughs in cryptocurrencies and tokenization

Changes in regulatory policies, intensified industry competition, and economic recession risks may affect the company’s performance.

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[0] Jinling API - Goldman Sachs (GS) Real-Time Quotes and Company Profile Data

[1] Zhitong Finance - “Goldman Sachs Regains Top Spot in Wall Street Equity Capital Markets! ‘Prediction Markets’ May Be the Next Revenue Generator” (https://hk.investing.com/news/stock-market-news/article-1272038)

[2] CoinDesk - “Goldman Sachs Sees Crypto, Tokenization and Prediction Markets as Growth Areas” (https://www.coindesk.com/zh/business/2026/01/15/goldman-sachs-sees-crypto-tokenization-and-prediction-markets-as-growth-areas)

[3] NetEase Finance - “Prediction Markets Have Never Been So Strong” (https://www.163.com/dy/article/KJEBSIQR055262WG.html)

[4] Gambling Insider - “Polymarket Hit With First US Sports Prediction Market Lawsuit” (https://www.gamblinginsider.com/news/104279/polymarket-nevada-lawsuit-sports-prediction-markets)