CoinDesk
Polymarket has launched five-minute Up/Down cryptocurrency contracts on its regulated U.S. platform, operated by QCX LLC under CFTC oversight. Traders predict whether a cryptocurrency will finish above or below its starting price; a correct call pays $1 per share, while an incorrect one pays nothing. The launch comes as the CFTC investigates Polymarket’s compliance with a 2022 settlement and reviews customer protections on the U.S. platform, Reuters reported.
Why it matters
The all-or-nothing format makes short-term derivatives easier to understand, but a simple interface does not remove the risks of trading contracts settled against a fast-moving price. Researchers studying Polymarket’s earlier five-minute Bitcoin contracts reported a roughly 50% increase in spot order flow during their final 10 seconds. Their analysis identified 821 wallets linked to settlement periods they classified as manipulated, estimated $8.2 million in associated profits, and attributed 93% of corresponding losses to retail traders. The study examined older contracts and does not establish manipulation in the new U.S. products.
Polymarket’s U.S. contracts use CF Benchmarks real-time dollar indexes, averaging 60 observations during the final 60 seconds. That differs from the earlier settlement approach examined in the research. A minute-long average can blunt a brief last-second price spike, but it cannot rule out sustained pressure, particularly in less liquid cryptocurrencies.
Market impact
The launch brings prediction-market competition into a growing field: Kalshi recorded more than $1 billion in crypto event-contract trading in March 2026, according to an arXiv paper, while Nasdaq and Cboe have considered similar products. The format could broaden access to short-duration trading, while regulatory scrutiny and settlement design will help determine how these markets develop.
The CFTC investigation concerns compliance with Polymarket’s 2022 settlement, including whether the company blocked U.S. users from its offshore platform, as well as customer protections and onboarding on its U.S. platform.
Frequently asked questions
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How do Polymarket’s five-minute Up/Down contracts pay out?
Traders predict whether a cryptocurrency will finish above or below its starting price. A correct prediction pays $1 per share; an incorrect one pays nothing.
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How does the U.S. platform determine contract outcomes?
It uses CF Benchmarks real-time dollar indexes and averages 60 observations recorded during the final 60 seconds of the contract window.
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What did researchers find in their study of older Bitcoin contracts?
They reported roughly 50% higher spot order flow in the final 10 seconds, identified 821 wallets linked to periods classified as manipulated, and estimated $8.2 million in associated profits.
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Do the earlier research findings prove manipulation in Polymarket’s new U.S. contracts?
No. The research examined older contracts and predates the new U.S. products. It does not establish manipulation in those products.
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What is the CFTC investigating regarding Polymarket?
The CFTC is investigating compliance with a 2022 settlement, including blocking U.S. users from the offshore platform, and examining customer protections and onboarding on the U.S. platform.
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