Coinbase Report: The $18 Billion Polymarket Prosperiy Driven by Stablecoin Payment Systems

In the latest weekly market commentary released by Coinbase Institutional Research on June 27, 2025, the focus is on the transformative role of stablecoins in the crypto ecosystem and the innovative strides made by Polymarket.

The report highlights how stablecoins are reshaping payment systems and facilitating new applications in blockchain-based prediction markets, underscoring their growing significance in both consumer and institutional sectors.

Stablecoins: The Backbone of Modern Payment Systems

Stablecoins, particularly USDT and USDC, have become essential components of the cryptocurrency market, serving as a bridge between volatile digital assets and traditional fiat currencies. As detailed in Table 1 of the report, USDT holds a market cap of $157.27 billion, while USDC follows with $61.77 billion. Both maintain a stable value of $1.00, offering a dependable medium for transactions across various platforms.

The adoption of stablecoins in payment systems is rapidly increasing due to their ability to provide fast, low-cost, and secure transactions. This is particularly evident in cross-border payments and remittances, where stablecoins offer a more efficient alternative to conventional banking systems.

Their integration into DeFi platforms further expands their utility, enabling seamless transactions without the need for traditional intermediaries.

Polymarket: Pioneering Blockchain-Based Prediction Markets

Polymarket stands out in the report as a leading example of how blockchain technology is revolutionizing prediction markets. The platform allows users to bet on the outcomes of real-world events, such as political elections and sports results, using stablecoins as the primary currency.

A recent report by Coinbase highlights Polymarket's significant growth, with the platform processing over $14 billion in lifetime trading volume. In May 2025 alone, it cleared $1 billion, with daily active traders averaging between 20,000 and 30,000.

Notably, during the U.S. presidential election in November 2024, Polymarket’s monthly volume surged to $2.5 billion, driving corresponding spikes in USDC transfers and bridge activity. This demonstrates the critical role stablecoins play in powering real-time market infrastructure.

Additionally, Polymarket is seeking a $1 billion valuation in a funding round led by Founders Fund, further solidifying its position as a leader in the prediction market space. The platform’s reliance on Circle’s USDC for all transactions on the Polygon blockchain has created measurable demand for the stablecoin, showcasing its utility in high-velocity settlement activities.

Stablecoins and the Future of Crypto Applications

As stablecoins continue to gain traction, their integration into consumer-focused platforms like Polymarket is expected to drive further adoption and innovation. This trend is indicative of a broader shift towards a more utility-driven crypto landscape, where stablecoins serve as a foundation for new applications and services.

Polymarket’s recent content partnership with X further positions prediction markets as viral social content tools rather than purely financial instruments. This collaboration is expected to accelerate momentum, attracting a wider audience to blockchain-based prediction markets.

Polymarket’s success, fueled by the strategic use of stablecoins, highlights the potential for blockchain technology to transform traditional industries and consumer experiences.