Polymarket Stocks: The Crypto Rails Connection

Polymarket is one of the leading prediction market platforms, and it runs on blockchain infrastructure. Specifically, Polymarket operates on the Polygon network and uses USDC, a stablecoin, for settlement. As we detail in our full review of the Prediction Markets presentation, Luke Lango identifies Coinbase (COIN) as the stock that owns the rails every Polymarket trade rides on.

How Polymarket Works

Polymarket is a decentralized prediction market platform. Users buy shares that pay out based on whether a predicted outcome occurs. Unlike Kalshi, which is a federally regulated U.S. exchange, Polymarket operates on blockchain infrastructure. Transactions settle in USDC, a stablecoin pegged to the U.S. dollar.

The use of crypto infrastructure means that every Polymarket trade depends on the underlying blockchain and stablecoin systems. This is where the investment opportunity lies. You do not need to use Polymarket directly. You can invest in the publicly traded companies that provide the infrastructure it depends on. For more on this approach, see our article on prediction market stocks.

Coinbase: The Infrastructure Owner

Coinbase (COIN) is the primary U.S. exchange for USDC. When Polymarket users buy and sell contracts, the transactions settle in USDC, and Coinbase is deeply integrated with the infrastructure that makes this possible. Coinbase also has deep integration with the Polygon network and the broader crypto ecosystem.

Additionally, Coinbase is rolling out prediction markets to its own user base. This means Coinbase is both the infrastructure layer for existing prediction market platforms like Polymarket and a direct competitor entering the space. That dual position is interesting because it means Coinbase benefits from prediction market growth regardless of which specific platform wins. For more on Coinbase’s role, see our article on prediction market stocks.

Robinhood: The Mainstream Alternative

Lango also reveals Robinhood (HOOD) as his main prediction market pick. Robinhood has partnered with Susquehanna to offer prediction markets to its 27 million users at a flat $0.01 per contract. While Coinbase provides the crypto infrastructure for Polymarket, Robinhood provides the mainstream trading platform for regulated prediction markets.

Both companies represent different angles on the same thesis. Coinbase is the crypto infrastructure play. Robinhood is the mainstream platform play. Lango recommends both as free tickers. For more on Robinhood, see our article on Robinhood prediction markets.

The Market Size

Lango cites estimates suggesting the prediction market could grow from $64 billion today to $1 trillion by 2030. Trading volume is up 400 percent in recent quarters, according to Pew Research data. In 2024, Kalshi won a landmark court battle against the CFTC, establishing legal clarity for prediction markets in the United States. Goldman Sachs has a team analyzing prediction markets and is reportedly building a prediction market trading desk.

If the market grows as projected, the infrastructure companies, both crypto and mainstream, benefit from increased transaction volume. The key insight is that you do not need to pick which prediction market platform wins. You need to own the companies that serve all of them. For more on the market dynamics, see our article on prediction market investing.

Kalshi vs. Polymarket

Kalshi and Polymarket represent two different approaches to prediction markets. Kalshi is a federally regulated U.S. exchange that appeals to mainstream users. Polymarket is a blockchain-based platform that appeals to crypto-native users. Lango’s thesis is that both can grow simultaneously because the total market is expanding so rapidly.

The investment implication is that both the crypto infrastructure (Coinbase) and the mainstream platform infrastructure (Robinhood) are relevant. You do not need to choose between the regulated and decentralized approaches. You can own both infrastructure layers. For more on Kalshi, see our article on what is the Kalshi app. For more on Kalshi’s specific stock angle, see our article on Kalshi stock.

The Risks

Polymarket operates on crypto infrastructure, which introduces risks related to smart contract vulnerabilities, regulatory uncertainty around crypto-based prediction markets, and competition from regulated alternatives like Kalshi. Coinbase is exposed to broader crypto market conditions, regulatory changes, and competition in the exchange space.

But the structural thesis is sound. Prediction markets are growing. Polymarket is one of the leading platforms. The infrastructure it depends on is owned by publicly traded companies. You can invest in those companies without touching crypto directly. For more on the broader investment landscape, see our article on online stock market trading.

This is not financial advice. Always do your own research before investing.

The Decentralized Alternative

Polymarket represents the decentralized, blockchain-based approach to prediction markets. Unlike Kalshi, which is a regulated exchange, and Robinhood, which is a regulated broker-dealer, Polymarket operates on a blockchain and uses crypto-based settlement. This means it is accessible globally, not just in the United States, and it does not require users to go through the same KYC (know your customer) process as regulated platforms.

The decentralized model has advantages and disadvantages. The advantage is global access and censorship resistance. Anyone with a crypto wallet can participate. The disadvantage is regulatory uncertainty. Polymarket has faced regulatory scrutiny in the US, and its legal status is less clear than Kalshi’s or Robinhood’s.

The Investment Implication

Lango’s thesis, as we detail in our full review, is the “backdoor access” approach: invest in the infrastructure companies rather than placing bets. The free tickers are Robinhood (HOOD) and Coinbase (COIN). Polymarket itself is not publicly traded, which means investors cannot buy Polymarket stock directly.

However, Polymarket’s growth contributes to the overall prediction market category growth that benefits all infrastructure providers. When Polymarket users trade prediction market contracts, some of them use Coinbase to fund their crypto wallets. This creates indirect revenue for Coinbase from Polymarket’s activity.

The broader point is that the prediction market category is growing across all platforms, centralized and decentralized. Lango projects growth from $64 billion to $1 trillion by 2030. Whether that growth happens on Kalshi, Robinhood, Polymarket, or some combination, the infrastructure companies benefit. For more on the competitive landscape, see our Kalshi stock article. For more on Robinhood, see our Robinhood prediction markets article.

Considerations

Polymarket is an important part of the prediction market ecosystem, but it is not directly investable. The investment thesis focuses on the publicly traded infrastructure providers: Robinhood for its user base and Coinbase for its crypto-native positioning. The growth of Polymarket validates the category and contributes to the volume that drives revenue for these infrastructure companies.

If you want to explore Lango’s full thesis, you can access the Prediction Markets presentation through InvestorPlace.