Prediction market platform Polymarket has officially re-entered the U.S. market after receiving regulatory approval from the Commodity Futures Trading Commission (CFTC). This marks a significant reversal from 2022, when the platform was restricted from serving U.S. customers. The approval, granted via an Amended Order of Designation, allows Polymarket to launch a U.S.-based application, initially offering a limited set of sports-related event contracts, with plans to expand into politics and crypto verticals over time.
Analyst Owen Lau of Clear Street framed the development as a potential game-changer for major crypto platforms like Coinbase. He suggests prediction markets could become a powerful engagement and retention tool, helping drive user activity and stickiness amid rising competition. Coinbase's massive scale—over 100 million verified users and 9.3 million monthly transacting users—provides a sizable distribution base for such event contracts. Lau estimates Coinbase could generate up to $700 million from prediction markets in 2026.
The resurgence coincides with a major shift in trader behavior. Following a brutal crypto market crash that erased approximately $150 billion in value from late 2024 to late 2025, many traders have migrated from speculative altcoin and memecoin trading to prediction markets. Data from Dune Analytics shows weekly notional volume on platforms like Polymarket and Kalshi skyrocketed from $500 million in June 2025 to nearly $6 billion by January 2026. Installations tell a similar story: Polymarket's app installs jumped from 30,000 to over 400,000 in a year, while Kalshi's grew from 80,000 to 1.3 million.
Polymarket is entering the market with an aggressive, ultra-low fee structure, offering 10 basis point taker fees and zero maker fees, which Lau notes is the lowest among major prediction market and sports betting platforms. This stands in stark contrast to the reported net revenue margins of 6.7% for DraftKings and 10.1% for FanDuel.
However, the regulatory landscape remains fragmented. While the CFTC approval provides federal-level clarity, state-level risks persist. On January 20, 2026, a Massachusetts judge granted an injunction preventing rival platform Kalshi from offering sports-related event contracts in the state. At least three states—Massachusetts, Nevada, and Maryland—have issued unfavorable rulings against prediction market platforms, creating a patchwork regulatory environment that could complicate national expansion.
The trend is drawing in major crypto firms. Coinbase launched its own prediction market product in December 2025, with trades routed through Kalshi. Gemini and Crypto.com have rolled out similar offerings, with Crypto.com even white-labeling the service for Trump Media. This integration underscores a broader industry shift, where prediction markets are increasingly seen not as standalone profit centers but as complementary features that enhance platform utility and user retention.
