Gemini Crypto Exchange Eyes Prediction Market

Cryptocurrency exchange Gemini Space Station is reportedly preparing to offer prediction market contracts.

The move would put Gemini in the company of a host of other financial firms entering the prediction market space, which presents a federally regulated way to bet on the outcome of everything from sporting events to elections, Bloomberg reported Wednesday (Nov. 5), citing unnamed sources.

Gemini, run by billionaire twin brothers Cameron Winklevoss and Tyler Winklevoss, has discussed introducing products as soon as possible, the report said.

The company is seeking regulatory approval to create its own derivatives exchange, or a designated contract market, and Gemini has discussed using such an exchange to trade prediction contracts, according to the report.

Gemini did not respond to PYMNTS’ request for comment.

Gemini’s plans would have the company competing with players such as Kalshi, which is already registered with the Commodity Futures Trading Commission, and Polymarket, which plans to reopen in the United States in the near future, per the report.

Other exchanges and retail investment brokers have chosen to partner with existing and licensed prediction market platforms, the report said. Robinhood, for example, is offering its customers event contracts from Kalshi.

In the best-case scenario, the embrace of events-based contracts could represent a new class of assets: event outcomes traded with “derivatives-grade infrastructure transparency and liquidity,” PYMNTS reported Oct. 22.

“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,” the report said. “

The only sure outcome right now appears to be forward momentum. Kalshi and Polymarket, for example, announced Oct. 22 a landmark partnership with the National Hockey League.

The momentum is being upheld by the market architecture, which permits broader products, and the entry of major platforms, which indicates scale. In October, prediction markets hit a new record of $2 billion in weekly volume.

“Still, despite the appearance of financial market sophistication, prediction markets can raise troubling parallels with gambling,” PYMNTS wrote. “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.”