Polymarket’s U.S. Comeback Positions Prediction Markets as Coinbase’s Secret Retention Weapon: Analyst

Prediction markets just got a second wind in the U.S.—and one analyst sees a savvy retention play unfolding for a crypto giant.

The Strategic Pivot

Polymarket's return to American users isn't just about offering bets on world events. It's being framed as a clever wedge for Coinbase to keep users glued to its ecosystem. Think of it as a high-stakes loyalty program, where engagement is the real currency.

Beyond Simple Speculation

This move transforms prediction markets from a niche curiosity into a core utility. It's not merely gambling on election outcomes or sports scores; it's about creating a sticky, interactive experience that traditional finance can't replicate. The platform bypasses old regulatory hurdles by leveraging crypto's native infrastructure.

The Retention Engine

Analysts suggest this could cut user churn significantly. When your exchange also offers a compelling, social, and financially engaging playground, why leave? It turns passive holders into active participants, locking in attention and assets. A cynical finance jab? It's the ultimate 'engagement farming' strategy—monetizing user attention more efficiently than any quarterly earnings call ever could.

Prediction markets are no longer a side show. They're becoming a central act in the battle for user mindshare, and Coinbase might just have found its secret weapon.

Ultra-Low Fees Show Growing Competition

Polymarket’s comeback is accompanied by a notably aggressive pricing structure. The platform is offering 10 basis point taker fees and zero Maker fees which Lau believes is the lowest among major prediction market and sports betting platforms.

For comparison, DraftKings and FanDuel reported net revenue margins of 6.7% and 10.1%, respectively. Lau said Polymarket’s pricing makes it a credible alternative to incumbent sports betting operators and signals increasing fee compression across event-based trading markets.

State-Level Regulatory Risk Remains Fragmented

While the CFTC approval may suggest improved federal-level clarity for certain event contracts, Lau cautioned that regulatory risk remains uneven at the state level.

On Jan. 20, 2026, a Massachusetts judge granted an injunction preventing rival platform Kalshi from offering sports-related event contracts in the state.

More broadly, at least three states — Massachusetts, Nevada, and Maryland — have issued unfavorable rulings against prediction market platforms, highlighting continued fragmentation across U.S. jurisdictions. This patchwork environment could complicate the sector’s expansion even as federal oversight becomes clearer.

Coinbase Seen as Key Distribution Partner

Lau argues that these developments represent an opportunity for Coinbase and indirectly Circle to partner with Polymarket or other prediction market platforms.

Coinbase’s scale — more than 100 million verified users and 9.3 million monthly transacting users — provides a sizable and relevant distribution base for event contracts. In his note, Lau suggests that prediction markets could benefit from being embedded into larger platforms with existing user engagement.

However, he notes that prediction markets may not become major standalone profit centers in the NEAR term. Instead, Lau expects them to serve primarily as engagement and retention tools within Coinbase and other integrated platforms, helping drive activity and user stickiness amid rising competition.

As prediction markets expand beyond sports into politics and crypto, Polymarket’s U.S. return could mark a new phase for event-based trading — even as regulatory uncertainty continues to shape the sector’s trajectory.