Goldman Sachs Research predicts the market, with CEO David Solomon calling it “very interesting,” having met with the heads of two major companies in the past two weeks. They are forming a team to study tokenization, stablecoins, and prediction markets. Solomon pointed out that the products are already similar to derivatives regulated by the CFTC. Mainstream institutions entering could enhance legitimacy and trading volume. The Clarity Act will determine how to participate.
Strategic signals from Goldman Sachs CEO’s hours-long meetings
Goldman Sachs CEO David Solomon stated on Thursday that the firm has assembled a large internal team to research cryptocurrency-related technologies and prediction markets, highlighting Wall Street’s top institutions’ focus on the next phase of digital market structure. During the Q4 earnings call, Solomon said Goldman is dedicating significant time and senior attention to tokenization, stablecoins, and prediction markets, as regulators and market participants discuss how these products can integrate into the existing financial framework.
Solomon said: “Our company has a large number of people focused on tokenization and stablecoins.” He also added that the firm is not rushing to be a pioneer but is steadily advancing to understand where digital market infrastructure can expand or accelerate Goldman’s existing businesses. “I think we don’t need to be the leader,” Solomon said. “But you wouldn’t be surprised that we have a huge team, spending a lot of time communicating with senior leadership, doing a lot of work so we can clearly decide our investment and development directions, and how these technologies can scale or speed up our current businesses, frankly, also discovering new business opportunities.”
This high-level direct involvement is extremely rare on Wall Street. Usually, research into emerging financial products is handled by mid-level teams, with CEOs only involved in final decisions. But Solomon personally spending hours meeting with prediction market companies indicates that Goldman’s focus on this area has risen to a strategic level. Such CEO involvement is uncommon in Goldman’s history; the last similar high-level engagement might have been in the early 2000s when Goldman entered the commodities trading market.
Three major signals of Goldman Sachs’ prediction market strategy
CEO personally meeting: Over the past two weeks, Solomon personally held hours-long discussions with the heads of two major prediction market companies
Large internal team: A substantial research team focused on tokenization, stablecoins, and prediction markets
Direct senior communication: The team engages intensively with senior leadership, not just mid-level autonomous research projects
Solomon indicated that prediction markets have become an area where Goldman’s leadership is directly involved, noting he recently met with key players in the field. “I think prediction markets are also very interesting. Over the past two weeks, I personally met with two large prediction companies and their leadership, having several hours of discussions to learn more.” The description of “hours-long meetings” suggests discussions far beyond formal visits, likely involving concrete cooperation models, product design, regulatory responses, and substantive issues.
The two major prediction market companies are likely Polymarket and Kalshi. Polymarket is a crypto-native prediction platform that saw over $3 billion in trading volume during the 2024 US election but faces regulatory pressure for not being registered in the US. Kalshi operates under US CFTC regulation, allowing US users to legally trade event contracts. Meeting both suggests Goldman may be evaluating the pros and cons of “crypto-native” versus “traditional compliant” paths.
Regulatory breakthrough: prediction markets as derivatives
Solomon said some prediction market products are already similar to familiar tools used by traditional financial institutions, especially regarding regulation. “When you think about these activities, especially those under the regulation of the US Commodity Futures Trading Commission (CFTC), they look like derivatives contracts,” he said. This observation is critical because it provides regulatory legitimacy for Goldman to enter prediction markets.
What is the essence of prediction markets? Users bet on future events (such as election outcomes, economic data, sports matches), essentially buying a contract that the event will occur. This is very similar to futures, options, and other derivatives—pricing uncertain future events. The only difference is the underlying: derivatives are based on commodities, stocks, interest rates, while prediction markets focus on discrete events (happen or not).
From a regulatory perspective, if prediction markets are classified as “derivatives,” they can be incorporated into the existing CFTC framework without creating a new regulatory category. Clarifying this regulatory path is what Goldman values most. As a regulated financial institution, Goldman can only operate in clearly regulated areas. When the CFTC has approved platforms like Kalshi to operate event contracts, it sets a precedent.
He said Goldman is focused on understanding how these markets can integrate with the company’s core businesses and serve clients. “Therefore, I can see the intersections with our business, and we are very attentive to understanding this, the regulatory structures that will form around these areas, and what opportunities we might have to develop relevant capabilities or collaborate with partners to serve our clients.”
Three key intersections between prediction markets and traditional finance
Hedging needs: Companies can hedge risks related to policies, regulations, elections, etc.
Information discovery: Prediction market prices aggregate dispersed information, providing references for investment decisions
Derivative-like structure: Event contracts are essentially binary options, fitting into existing derivatives frameworks
Goldman’s clients—including hedge funds, corporate finance, family offices—have a demand for hedging event risks. For example, a multinational might want to hedge against “US tariffs on China”; a tech company might hedge “AI regulation passing.” Traditional markets cannot directly offer such hedging tools, but prediction markets can. If Goldman can productize prediction markets and offer them to institutional clients, it could open a new revenue stream.
Clarity Act and Goldman’s wait-and-see game
Solomon emphasized that regulatory developments will play a key role in how and when Goldman becomes more active in digital assets. He pointed out that legislative discussions in Washington are part of the firm’s assessment process. “Obviously, there’s a lot of discussion around the Clarity Act,” Solomon said. “I was in Washington on Tuesday, talking with some people about what we think is important for us within the framework of the bill.”
His Tuesday trip was likely lobbying Congress to influence the final text of the Clarity Act. For Goldman, an ideal bill would clarify the legal status of prediction markets, set reasonable compliance thresholds, and provide a clear path for traditional financial institutions to participate. If the bill is too strict (e.g., banning political event trading), Goldman’s interest might diminish. If it’s too lax (e.g., no regulation at all), Goldman cannot participate due to compliance restrictions.
While acknowledging the potential of crypto-related market infrastructure, Solomon warned against expecting rapid transformation. “I think we are still in the early stages,” he said. “Sometimes, we have many reasons to be excited and interested in these things, but the pace of change may not be as fast and immediate as some experts suggest. But I believe they are important, real, and we are investing a lot of time.”
This “important but not urgent” stance is typical of Goldman Sachs. As one of Wall Street’s most conservative investment banks, Goldman does not rush to trial-and-error like startups. It spends years researching, testing, lobbying, until regulation is fully clear, business models are validated, and risks are manageable before making large-scale moves. This caution may cause Goldman to miss some first-mover advantages but also helps avoid many pitfalls early adopters face.
Four-stage path for Goldman’s entry into prediction markets
Research phase (current): Building internal teams, CEO meetings, assessing regulation and business models
Pilot phase (2026): If Clarity Act passes, small-scale testing of event contract products
Scaling phase (2027): Officially launching prediction market hedging products for institutional clients
Leadership phase (2028+): Using client resources and technological advantages to become an industry leader
This four-stage path suggests Goldman’s large-scale entry might not occur until after 2027. But its entry alone will reshape the industry landscape. When a top bank managing trillions of dollars and serving global institutions enters prediction markets, liquidity, product complexity, and participant quality will undergo a qualitative change.
Legitimacy endorsement and liquidity explosion from mainstream institutions
The entry of this mainstream Wall Street institution could boost legitimacy and trading volume in this loosely regulated but rapidly growing financial niche. Some market makers have already joined the competition. Goldman’s brand endorsement will trigger a chain reaction. When other Wall Street firms see Goldman entering, Morgan Stanley, BofA Merrill, Citi, and others will follow, creating a “herd effect.”
Legitimacy is crucial for prediction markets. Currently, many institutional investors are cautious, worried about regulation, reputation, and moral concerns related to gambling. But when a “white-glove” institution like Goldman enters, prediction markets will be redefined as “financial innovation” rather than “gray-area gambling.” This narrative shift will open the floodgates for institutional capital.
Liquidity could also surge more directly. Currently, Polymarket’s daily volume is a few tens of millions USD, Kalshi’s even less. But if Goldman enters and offers prediction products to its institutional clients, a single large hedge fund order could reach hundreds of millions USD. Such institutional-level liquidity would transform prediction markets from “retail gambling” to “institutional financial instruments,” narrowing bid-ask spreads, increasing depth, and raising product sophistication.
Goldman’s involvement may also drive product innovation. Today’s prediction markets mainly focus on politics and sports. But institutional clients need more professional event contracts, such as “Will the Fed cut rates in March,” “Will a certain tech merger be approved,” “Will a country default,” etc. These specialized contracts require more precise pricing models and risk management—areas where Goldman excels.
From a competitive standpoint, Goldman’s entry is both an opportunity and a threat to existing prediction platforms. Opportunity lies in Goldman possibly partnering with existing platforms rather than building its own, bringing institutional clients and liquidity. Threat comes from Goldman’s vast client base and technological prowess; if it chooses to build its own platform, it could quickly surpass current players. Polymarket, Kalshi, and others need to establish enough moat before Goldman’s official entry.
Tokenization and stablecoins: a trinity strategy
Notably, Solomon discussed prediction markets alongside tokenization and stablecoins, indicating Goldman views these three as a trinity of digital financial infrastructure. Tokenization enables traditional assets (stocks, bonds, commodities) to circulate on blockchains; stablecoins provide digital dollar equivalents for settlement; prediction markets are new tools for risk hedging and information discovery. Combining these could create entirely new financial products.
For example, Goldman could launch a “tokenized US Treasury + prediction market hedge” combo product. Clients buy tokenized US Treasuries for fixed income, while hedging tail risks like “US default” or “interest rate surge” via prediction markets. Entire transactions settle on blockchain, using stablecoins as payment, operating 24/7 without banking hours. Such products would be more convenient and efficient than traditional financial tools.
Solomon emphasized regulation’s role in shaping Goldman’s timing and approach. “Obviously, Washington is discussing the Clarity Act a lot,” he said. “I was in Washington on Tuesday, talking with some people about what we think is important for us within the bill’s framework.” This active policy engagement shows Goldman is not passively waiting for regulation but trying to influence its direction, creating favorable conditions for its entry.
Goldman’s digital asset trinity strategy
Tokenization: Moving traditional assets (stocks, bonds, commodities) onto blockchain to enhance liquidity and trading efficiency
Stablecoins: Providing digital dollar equivalents for real-time 24/7 settlement
Prediction markets: New risk management and information discovery tools for institutions to hedge event risks
Solomon’s cautious tone is also noteworthy: “I think we are still in the early stages. Sometimes, we have many reasons to be excited and interested, but the pace of change may not be as fast and immediate as some experts suggest. But I believe they are important, real, and we are investing a lot of time.” This “important but slow” outlook sets realistic expectations. Investors shouldn’t expect Goldman to launch prediction markets tomorrow but should see it as a long-term trend.
From an industry perspective, Goldman’s stance marks a key moment for prediction markets to “break out.” When the most conservative investment bank on Wall Street begins serious research, this once “crypto gambling” domain gains mainstream financial recognition. This recognition comes not only from Solomon’s words but also from Goldman’s resource commitments—large internal teams, CEO involvement, policy dialogues. These are real investments, showing Goldman’s confidence in prediction markets is a strategic commitment, not just lip service.
For existing prediction platforms, Goldman’s entry is both validation and challenge. Validation in proving prediction markets’ business value and potential; challenge in needing to build sufficient technological edge, user base, and brand recognition before Goldman’s full-scale move. The answer will start to emerge around 2026. For the entire crypto industry, Goldman’s interest again proves: when technology matures and regulation clarifies, traditional giants won’t miss profitable new markets. The prediction market spring may just be beginning.
