According to Inversion CEO, prediction market add-ons will attract churn in the fintech sector because mainstream platforms will seek fast engagement growth.
The caution draws attention to the threats to retention, regulation, and platform identity with the growth of the markets. Capital Santiago Roel Santos, Founder of Inversion Capital, stated that prediction markets can reform user behavior in a pernicious manner. He claimed that the rapid adoption can undermine trust and long-term values for the retail users.
The churn risks and prediction markets
Santos likened prediction markets to casino products that increase turnover among users. He explained that more often there are losses, which enhance the possibility of account liquidation. According to him, liquidation eliminates the users of platforms.
He emphasized that it is not about losing money. The issue of concern is the rate at which users leave platforms. He said that a churned user is not a source of any long-term value.
Santos cautioned that financial superapps will be over-extractive. He mentioned that platforms can be short-term payout optimum. This strategy may decrease the lifespan and undermine the relationships between users.
He further said that winning fintech products are stable-centered. Minimality and dependability aid in the expansion of platforms as well as users. The long-term involvement is more important than the initial enthusiasm.
Mainstream platforms increase services
In 2025, a number of platforms started offering prediction markets via partnering. Robinhood also collaborated with Kalshi in the sports betting industry. It now has its Prediction Markets Hub, which encompasses major football events.
Coinbase is also making a prediction market in collaboration with Kalshi. The trade is in search of new asset classes due to the weaker digital asset demand. Gemini was approved by the CFTC as a DCM.
These actions indicate that there is growing enthusiasm for predictive data. Platforms serve to boost activities when the trading volumes are low. Santos thinks that such a strategy can work against the missions of core platforms.
According to him, products such as insurance and savings establish long-term relationships. These tools are incorporated into day-to-day financial management. They do not have flash, but promote user engagement.
Market control and regulation increase
Those working against prediction markets claim that they are poorly regulated and therefore prone to abuse. They associate growth with lax regulatory examination over the past years. There is a fear of insider trading the gambling. and the trading mixing.
In a 2024 election in the US, Polymarket and Kalshi went viral. Gamble amounts were in the billions. Polling was usually against the market odds of Donald Trump.
By the end of the elections, there was more conformity to the market forecasts. This reinforced the assertions that betting markets are superior to forecasts. Odds were later incorporated in news coverage by media groups.
Intercontinental Exchange was to spend a total of up to $2 billion in Polymarket. The move was after a high demand among traders for predictive market data.
Such platforms have been challenged by regulators in other states such as Nevada and New York. Cases challenge the issue of whether contracts are gambling bets. The sector is still shrouded in legal uncertainty.
Santos determined that predicting markets can increase the metrics but jeopardize the platform’s stability. He claimed that staying power is the most important thing in fintech companies. He argued that trust and restraint are the key to durable growth.
