Coinbase is preparing to unveil an in-house prediction market in partnership with Kalshi, as part of a strategic initiative to diversify the asset classes offered on their cryptocurrency exchange. According to a source familiar with the plans, the announcement could arrive as early as next week, marking a significant step in Coinbase's expansion efforts during a time when investor enthusiasm for digital assets is wavering.
Though the partnership with Kalshi is not exclusive, Kalshi will be the sole prediction market operator collaborating with Coinbase at the launch of this new product. Over the past month, speculation over the launch has grown, fueled by a purported screenshot of Coinbase's prediction market dashboard, shared by researcher Jane Manchun Wong on social media.
The news surfaced on November 19, when The Information reported on Coinbase's intentions to launch prediction markets, which was supposedly corroborated by an upcoming reveal at their 'Coinbase System Update' event scheduled for December 17. Bloomberg echoed these claims, also noting the potential announcement of a tokenized stock offering alongside the prediction market launch.
While Coinbase has not officially confirmed these reports, they have advised staying tuned for their upcoming event but withheld details on the timeline for the prediction market's availability.
This development highlights Coinbase's efforts to transform itself into an 'everything exchange', aiming to provide a comprehensive platform for trading diverse assets, including cryptocurrency tokens, tokenized stocks, and event contracts. CEO Brian Armstrong outlined this vision in May, aiming for Coinbase to become a leading financial services application within a decade.
Coinbase's plans come amid stiff competition from other platforms like Robinhood, Gemini, and Kraken, all of which have introduced tokenized equity offerings and are exploring prediction markets to varying degrees. The expansion of financial instruments at Coinbase also corresponds with a cooling sentiment toward digital assets, as recent market liquidations have led investors to shift towards safer options like gold.
Bitcoin, for example, experienced a significant drop, falling to around $85,000 in early December, marking its lowest point since March of the previous year. Similarly, Coinbase's shares have also decreased over the past quarter.
The collaboration with Kalshi marks a strategic move by the U.S.-based event contracts operator to integrate its products across various brokerages, enhancing its presence in the competitive prediction market sector. Earlier this year, Kalshi embedded several of its prediction markets into Robinhood's trading platform, and it continues to seek similar partnerships with other major brokerages, including those within the crypto industry.