Fintech platforms adding prediction market features risk accelerating user churn, according to Inversion Capital founder and chief executive Santiago Roel Santos.
Santos said the growing trend toward prediction markets introduces casino-like dynamics that undermine long-term value creation.
He argued that while prediction markets have merit in theory, embedding them in mainstream finance apps creates structural risks.
Santos said these features increase the likelihood of user account liquidation over time.
The problem with casino-like products isn’t that users lose money. It’s that casinos accelerate churn.
Santiago Roel Santos said.
He explained that liquidation removes users entirely from financial platforms.
The longer you exist inside a casino, the higher the probability of liquidation. And liquidation means you’re out of the game entirely. A churned user is worth zero.
Santos added.
Several major fintech and crypto platforms are expanding into prediction markets.
Robinhood has increased its focus on event-based markets throughout 2025.
Crypto exchanges Coinbase and Gemini are also preparing to launch similar offerings.
These products allow users to speculate on outcomes such as political events and sports results.
Santos warned that this shift distracts from fintechs’ core mission of providing accessible financial services.
He said platforms like Robinhood initially succeed because of simplicity and user-friendly design.
Products like Robinhood succeed initially because they are simpler, more accessible, and more digitally native than incumbents.
Santos said.
Santos argued that fintech firms should evolve alongside their users rather than exploit peak speculative behaviour.
Users age. Over time, the real opportunity is to grow with them and capture more of their financial lives.
He further said.
He said focusing on short-term revenue extraction risks weakening long-term customer relationships.
Blockchain-based prediction markets saw a surge in adoption during the 2024 US elections.
Robinhood first entered the space through a partnership with Kalshi earlier in the year.
Coinbase recently announced prediction markets as part of its broader “everything app” strategy.
An affiliate of Gemini has also secured a US licence to offer event contracts.
Santos said prediction markets may initially boost revenues but create fragile business models over time.
Financial superapps that treat churn as a first-class risk will end up with stronger moats and better long-term outcomes.
Santos said.
He urged fintechs to prioritise products aligned with long-term financial stability.
Santos said services such as credit cards, insurance and savings products offer greater durability.
These are boring. The data suggests that’s precisely why they work.
Santiago Roel Santos said.