Prediction Market Growth Lifts USDC Flows, Signaling Stablecoin Utility Shift
Polymarket, the decentralized prediction market
platform, sought to become the latest crypto unicorn after closing a new
funding round at a roughly $1 billion valuation, Coinbase noted in its latest
research.
The raise, led by Founders Fund, marks a major turning
point for event-driven crypto platforms as venture capital pivots toward
consumer-focused applications in the space.
In just one day, regulated rival Kalshi followed with
its own $185 million raise at a $2 billion valuation, signaling that prediction markets may be one of the few crypto sectors seeing accelerating traction in
2025.
Rising Volumes, Mainstream Appeal
Polymarket’s growth has been driven by surging user
activity despite regulatory barriers preventing US-based trading. The platform
has handled more than $14 billion in lifetime trading volume, with over $1
billion processed in May alone.
It now reportedly attracts between 20,000 and 30,000 daily
traders, outpacing many mid-tier decentralized exchanges and positioning itself
as a go-to destination for non-crypto-native users interested in financial
betting on news cycles.
New partnerships are reinforcing this momentum. A
recently announced content deal with X (formerly Twitter) aims to boost
visibility by embedding viral prediction content across mainstream feeds,
pushing the platform beyond niche crypto circles.
USDC Gains as Settlement Token
Stablecoins are riding the coattails of prediction
market growth. All Polymarket transactions settle in USDC on the Polygon
blockchain, contributing to a sharp increase in stablecoin flows.
While the crypto spotlight has turned to consumer
apps, macro developments also helped ease market stress. A ceasefire between
Israel and Iran, in place since June 23, contributed to improved risk
sentiment. Crypto markets stabilized alongside equities, with the COIN50 index
recovering and bitcoin holding above $100,000.
Read more: XRP News: Token Extends Losses Despite Whale Transfers and Easing Geopolitical Tensions
Volatility has declined. Short-term demand for
downside hedges in bitcoin has faded, as reflected in 25-delta put-call skews
on 30-day options. Longer-dated options suggest that investors want exposure to
crypto upside without incurring full spot costs, indicating renewed confidence
despite geopolitical uncertainty.
With the July 9 and August 12 deadlines for tariff decisions approaching, traders remain largely indifferent to the potential
impact on inflation. Fed Chair Jerome Powell warned this week that tariffs
could influence prices in the second half of the year, but markets continue to
focus on disinflation trends, especially in services.
Legislative Momentum Builds for Stablecoins
Policymakers also made headway on regulatory clarity.
The US Senate passed the GENIUS Act, a stablecoin framework. President Trump called on lawmakers to swiftly and without amendments approve the stablecoin measure. Meanwhile, Senate Banking
Committee Chair Tim Scott said the market structure bill could be completed by
the end of September.
Separately, the Fed announced it would eliminate
“reputational risk” from its bank supervision guidelines, a move seen as
further easing pressure on crypto firms that had faced banking restrictions
under earlier policies.
This article was written by Jared Kirui at www.financemagnates.com.