Coinbase's Prediction Market Expansion Targets Crypto One-Stop Shop Ambitions

Coinbase Global Inc. is developing a prediction markets platform backed by Kalshi, according to screenshots shared by tech researcher Jane Manchun Wong. The platform, set to be operated through Coinbase Financial Markets, would allow U.S. users to trade outcomes on events spanning politics, economics, sports, and technology, leveraging Kalshi's existing infrastructure according to tech researcher Jane Manchun Wong. The development signals Coinbase's latest push to expand its offerings into the fast-growing prediction market space, positioning itself as a "one-stop shop" for crypto users.

Prediction markets, which enable participants to bet on the likelihood of future events, have gained traction in 2025 as platforms like Kalshi and Polymarket see surging volumes. Kalshi, co-founded by former Wall Street traders, has become a key player by accurately predicting outcomes such as the 2024 U.S. presidential election and the New York City mayoral race. The platform's use of USDC stablecoin for settlements has drawn institutional interest, with Coinbase now stepping in to provide custody for these reserves.

On November 13, Kalshi announced a partnership with Coinbase Custody to secure USDC holdings for its event-based trading contracts. This collaboration aims to enhance trust and regulatory compliance, critical factors as prediction markets increasingly intersect with traditional finance. Coinbase Custody, which offers cold storage, segregated accounts, and insurance protections, will safeguard trader funds, ensuring stability even amid crypto market volatility. The move aligns with Kalshi's broader 2025 growth strategy, including a valuation surge to over $10 billion and integration with Google Finance for real-time odds dissemination.

For Coinbase, the prediction markets venture represents a strategic expansion beyond its core exchange business. The company has previously partnered with Kalshi, acting as a custodian for USDC-based event contracts since July. By integrating Kalshi's platform, Coinbase aims to attract both retail and institutional users seeking to monetize niche expertise, as seen in the case of traders like Joel Holsinger, who earns income by predicting political statements on Kalshi.

The partnership also underscores the growing role of stablecoins in financial innovation. USDC, issued by Circle and backed by reserves, provides a reliable medium for prediction market settlements, avoiding the volatility of assets like Bitcoin or Ethereum. This stability is crucial for maintaining confidence in event-based trading, where accurate payouts depend on predictable value.

Analysts view the development as a potential catalyst for mainstream adoption of prediction markets. "By combining Kalshi's regulated framework with Coinbase's institutional-grade custody, they're creating a blueprint for compliant, secure trading," said one market observer cited in CoinLaw according to CoinLaw analysis. The integration could also accelerate competition among crypto exchanges, with rivals like Gemini and Crypto.com recently announcing similar initiatives.

Coinbase's entry into prediction markets comes as the broader crypto sector faces regulatory scrutiny and market turbulence. While XRP and Bitcoin experienced recent declines, the prediction market segment remains insulated due to its reliance on stablecoins and real-world data according to CoinLaw analysis. However, the success of Coinbase's platform will depend on user adoption, regulatory clarity, and the ability to maintain liquidity in diverse event categories as reported by LiveBitcoinNews.