Coinbase Could Be Prepping Kalshi-Powered Prediction Market

Cryptocurrency exchange Coinbase is reportedly preparing to introduce a prediction market in collaboration with Kalshi.

An announcement on the project could come as early as the next few days, CNBC reported Friday (Dec. 12), citing a source close to the matter. The source said that the partnership is not exclusive, though Kalshi will be the only prediction markets operator working with Coinbase when the product rolls out.

According to the report there have been whispers and news reports of a possible prediction market launch from Coinbase for the last few weeks.

Reached for comment by PYMNTS, Coinbase offered this statement: “Tune in to the livestream on Dec 17th to find out what new products Coinbase is shipping.” The company’s “Coinbase System Update” event is scheduled for that day.

CNBC says that the launch — assuming it comes to pass — underscores Coinbase’s effort to reshape itself into a one-stop hub for all sorts of asset trading. CEO Brian Armstrong had outlined his “everything exchange” goal in May, telling investors Coinbase hopes to become a top financial services app.

The report also noted Coinbase is facing increasing competition from the likes of Robinhood, Gemini and Kraken, all of which have debuted tokenized equity offerings to users outside of the U.S. within the past year, while also exploring prediction markets.

“The momentum in the prediction market space is underpinned by several forces,” PYMNTS wrote in October. “First, the market architecture allows for far broader products: finance, culture, politics, entertainment, weather and increasingly sports, all packaged as yes/no contracts or binary outcomes.”

Beyond that, the report added, the entry of major platforms is a sign of scale. At the time, the markets had just hit a record high of $2 billion in weekly volume, reaching higher heights and more volume than during last year’s presidential election.

“Still, despite the appearance of financial-market sophistication, prediction markets can raise troubling parallels with gambling,” PYMNTS added. “That is most apparent when the event contracts track sports competitions, anecdotal political outcomes or entertainment awards. Such structures can resemble bets more than hedges on commodity futures.”

And as covered here last week, a growing number of states are trying to shut down prediction markets they view as unlicensed or illegal gambling operations, including Connecticut, Massachusetts, New York, New Jersey, Nevada, Maryland, Arizona and Illinois.