Coinbase Teams With Kalshi to Offer Prediction Market Access

Coinbase has become the latest financial platform to enter the prediction market game.

The cryptocurrency exchange announced Wednesday (Dec. 17) that it would begin to allow access to prediction markets in the U.S., part of a broader swath of new offerings announced at its “Coinbase System Update” event.

“You will soon be able to trade on the outcomes of real-world events like elections, sports, collectibles, and economic indicators, with prices of the event contracts determined by the collective trading activity of market participants,” the company wrote on its blog. “All market flow will come from Kalshi at launch.”

Coinbase said users can manage their prediction market positions alongside existing crypto, equities and cash balances. The company added that it plans to support contracts from other prediction market platforms in the months ahead.

“If you look at things like economic indicators … or elections, people are using prediction markets to try to figure out what is going to happen next month,” Coinbase CEO Brian Armstrong told CNBC. “Maybe 1% of people use it as an asset class to trade, and 99% of people are using it as a way to figure out what’s going to happen — almost like a competitor to traditional media or maybe even entertainment.”

The announcement follows a report from CNBC last week that the company was working with Kalshi on a new predictions market offering. It’s also part of a larger boom within the prediction markets space, with analysts at Citizens Bank predicting recently that these could become a new asset class.

That’s a belief also held by Vlad Tenev, CEO of trading platform Robinhood, who has said prediction markets are the company’s fastest-ever growing business. The company’s third-quarter earnings results showed users trading 2.3 billion event contracts during those three months. The total number of contracts traded came to 2.5 billion just for October.

And earlier this week, Robinhood expanded that offering, allowing users to make trades involving NFL games.

PYMNTS wrote about the prediction market boom in October, also contending events-based contract trading could represent a new asset class: “event outcomes traded with derivatives-grade infrastructure transparency and liquidity,” the report said.

“At its worst, it could serve as a potential regulatory arbitrage path around state gaming laws, one with thin consumer protections and opaque payout mechanics,” PYMNTS added.

Aside from prediction markets, Coinbase’s other new offerings include an expansion of its DEX trading integration to include access to Solana tokens, as well as futures and perpetual futures trading.