USDPrediction Market Sector Weekly Recap: Regulation Softens as Volumes Surge and Platforms Converge
This week’s prediction market sector recap shows regulators easing, platforms scaling fast, and TradFi, crypto exchanges, and startups converging on event-based trading. Volumes are exploding, U.S. oversight is fragmenting, and product innovation is accelerating, turning prediction markets from fringe experiments into a contested financial battleground with global implications emerging quickly.
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CFTC Reverses Ban on Political Event Contracts, Signals New Direction for Prediction Markets
The U.S. Commodity Futures Trading Commission (CFTC) is reversing its prior ban on political event contracts at prediction market firms like Kalshi and Polymarket. Chairman Mike Selig announced the withdrawal of a 2024 proposal equating these contracts with illicit activities, stating it was grounded in "merit regulation." Selig aims for new rulemaking that aligns with the Commodity Exchange Act and fosters innovation. This shift follows increased interest in prediction markets, particularly under the Trump administration, and hints at the CFTC's pivotal role in overseeing digital assets as Congress negotiates a broader crypto market structure.
Polymarket Files “POLY” Token Trademark, $7.7B Volume; Teams with Circle to Shift to Native USDC Settlement
Polymarket filed U.S. trademarks for a “POLY/$POLY” token on February 4, 2026, aims to expand governance/staking roles and reported $7.7 B monthly trading volume, while polygon-based markets and 15-minute fee markets show strong fees and activity growth. Circle Internet Group partnered with Polymarket, to transition from bridged USDC.e to native USDC settlement, strengthening dollar-denominated on-chain infrastructure and enhancing market integrity, with rollout in the coming months; this has driven increased USDC demand and institutional interest across prediction market ecosystems.
Kalshi Seeks US Margin-Trading Approval and Taps Sleeper’s 10M Users to Drive $800M+ Super Bowl Prediction Market Volume
Kalshi filed for U.S. Commodity Futures Trading Commission approval to offer margin trading to institutional investors, shifting from fully-collateralized contracts and seeking broader participation while adding an independent surveillance audit committee to monitor manipulation. The platform also integrated prediction markets into Sleeper’s app, aiming to expose its regulated event contracts to 10 million users ahead of Super Bowl 60, with annualized volume on Kalshi above $115 billion and the pro football market projected over $800 million in trades.
Jupiter Integrates Polymarket, Bringing On-Chain Prediction Markets to Solana DEX
Jupiter, a Solana-based DEX aggregator, has integrated Polymarket, marking the introduction of on-chain prediction markets within its platform. This integration establishes Jupiter as a potential central hub for prediction markets on Solana, combining its robust DEX infrastructure with event-based trading capabilities. Polymarket has become one of the leading prediction platforms, offering diverse markets covering politics, macroeconomic events, sports, and culture. Notably, despite facing stiff competition from Kalshi, Polymarket has seen significant growth, reporting an impressive $7.7 billion in trading volumes for January, reflecting escalating interest in event contract trading among users.
Cboe Plans to Revive Binary Options to Compete in Booming Prediction Market
Cboe Global Markets is considering relaunching "all-or-nothing" binary options to tap into the booming prediction market sector, where Kalshi and Polymarket achieved a record $17 billion trading volume in January 2026. The proposed fixed-return contracts would pay a set amount or expire worthless, appealing to retail investors. Cboe previously discontinued these options in 2008 due to lack of traction and regulatory scrutiny. Cboe plans a rigorous compliance framework for the new contracts, which aim to attract new traders. Kalshi and Polymarket's volumes increased significantly, illustrating the growing mainstream visibility and capital within prediction markets.
Hyperliquid Launches "Outcomes" Feature to Enter Prediction Markets Amid Growing Demand
Hyperliquid is introducing a new "Outcomes" feature on testnet through its HIP-4 upgrade, aiming to expand from perpetual trading into prediction markets and limited-risk options. This framework offers fully collateralized contracts akin to binary options but eliminates leverage, margin calls, and liquidation risks. The rollout coincides with rising popularity in prediction markets, attracting interest from major exchanges like Coinbase and Gemini, which compete with platforms like Polymarket and Kalshi. Outcomes will utilize Hyperliquid's USDH stablecoin and operate on its high-performance HyperCore execution engine, responding to increasing user demand for flexible, safe trading products.
Crypto.com Launches OG App for Prediction Markets as Volumes Soar to $17.5 Billion
Crypto.com has launched a standalone app, OG, for prediction markets, capitalizing on growing interest with monthly trading volumes reaching nearly $17.5 billion in January 2026, up from $2 billion last August. The new platform targets U.S. users and focuses on contracts related to financial, political, cultural, and entertainment events, especially sports. CEO Nick Lundgren leads OG through Crypto.com’s U.S. derivatives arm, which is regulated by the Commodity Futures Trading Commission. The app also plans to introduce margin and leveraged trading, marking a first for federally regulated prediction markets in the U.S., despite facing state-level regulatory challenges.
Coinbase Predict Launch Triggers Nevada Lawsuit Over Alleged Unlicensed Sports Betting
Coinbase launched Coinbase Predict on Feb. 4, 2026, rolling out a nationwide, event-based trading platform embedded in its main app, enabling U.S. users to trade “yes/no” contracts on politics, sports, crypto, macro data, and culture, priced from $0 to $1 with $1 minimum trades, funded via USD or USDC, and built with CFTC-regulated Kalshi, as part of CEO Brian Armstrong’s “Everything Exchange” strategy targeting a $37 billion prediction market sector. This week, the Nevada Gaming Control Board filed a civil lawsuit, alleging Coinbase’s sports-linked contracts constitute unlicensed gambling under state law, seeking an injunction despite Coinbase arguing exclusive federal oversight.
Gemini Exits Europe and Australia, Shifting Focus to U.S. Prediction Markets Amid Workforce Cuts
Gemini Space Station Inc. is ceasing operations in the U.K., EU, and Australia, cutting its workforce by 25% to concentrate on prediction markets in the U.S. Effective April 6, 2026, customer accounts in these regions will be withdrawn, after transitioning through eToro for asset transfer. The Winklevoss twins predict that prediction markets could surpass capital markets, revealing plans to launch their own marketplace, having already recorded over $24 million in trades from 10,000 users since December. Their shift responds to challenges abroad, asserting that the U.S. remains a vital market for Gemini's future growth and innovation.
Opinion Raises $20M in Series A to Expand Leading Decentralized Prediction Market Ahead of 2026 FIFA World Cup
Opinion, a decentralized prediction exchange, has raised $20 million in Series A funding, led by prominent firms like Hack VC and Jump Crypto. The platform, which launched in late 2025, has generated over $13 million in fees, distinguishing itself with a "macro-first" strategy focusing on central bank decisions, CPI data, and geopolitical events. Utilizing an on-chain orderbook and AI for event resolution, it provides real-time sentiment indicators for researchers and hedge funds. Performing robustly on the BNB Chain, Opinion controls one-third of global prediction market trading volume, with open interest exceeding $130 million, aiming to expand ahead of the 2026 FIFA World Cup.
This article has been refined and enhanced by ChatGPT.
