Crypto.com Expands Prediction Market Trading with New Market Maker Hire

Crypto.com Expanding into Prediction Markets

Crypto.com is seeking to expand its quantitative trading capabilities in the prediction market space by hiring a new market maker, according to a recent job listing. The Singapore-based exchange plans to build a team that will trade against its users, buying and selling financial contracts tied to the outcomes of sports events. This move highlights growing interest in the niche space of prediction markets and the broader effort by crypto exchanges to diversify into new asset classes according to Bloomberg.

The role, described as a "quant trader," is intended for someone who can generate profits while managing risk effectively. The company emphasized in its posting that it does not rely on proprietary trading for revenue and that its internal market maker does not have access to privileged customer data. However, critics argue that such trading creates potential conflicts of interest, blurring the line between prediction markets and traditional sports betting according to Bloomberg.

Crypto.com is not alone in this approach. Rival prediction market platforms like Kalshi and Polymarket are also building internal trading teams to deepen liquidity and attract institutional market makers. In fact, Kalshi faces a class-action lawsuit alleging that its market makers set betting lines that disadvantage retail users. Despite this, the firm's co-founder maintains that Kalshi Trading is not profitable and does not receive preferential treatment according to Bloomberg.

How Prediction Markets Are Evolving

Crypto.com's decision to hire a market maker reflects the broader evolution of prediction markets into a more mainstream financial product. These platforms allow users to trade contracts tied to real-world events, from political elections to economic data releases. The 2024 U.S. presidential race helped spark renewed interest in the space, with trading volumes surging as investors sought to bet on outcomes using digital assets.

In a similar move, Coinbase recently announced the acquisition of The Clearing Company, a prediction market startup, to bolster its expanding offerings beyond crypto trading. This acquisition marks Coinbase's tenth in 2025 and is part of a larger trend of traditional and crypto-native platforms diversifying into multiple asset classes under one roof. By integrating prediction markets, these companies aim to reduce their dependence on volatile crypto trading and capture a share of the growing prediction market space according to Reuters.

Regulatory and Investor Concerns

Despite their popularity, prediction markets remain a regulatory gray area. While exchanges like Kalshi operate under U.S. Commodity Futures Trading Commission (CFTC) oversight, others face scrutiny for resembling traditional gambling. For example, the head of the CFTC has hinted at a potential regulatory "dream team" with the SEC to clarify rules around digital assets, a move that could reshape the industry according to Finance Feeds.

Crypto.com has sought to position itself as a neutral platform, emphasizing that it discloses its internal trading team to the CFTC and does not engage in proprietary trading as a revenue source. However, some users remain wary of potential conflicts of interest, particularly as prediction market platforms begin to offer retail traders only a fraction of the advantages given to institutional market makers according to Bloomberg.

Meanwhile, the growing popularity of prediction markets has attracted not just crypto companies but also traditional financial institutions. For instance, JPMorgan is reportedly considering offering institutional crypto trading services, further signaling the convergence of traditional and digital financial markets according to The Block.

What This Means for Investors

For investors, the rise of prediction markets represents both opportunity and risk. These platforms offer a unique way to hedge bets on real-world events or capitalize on market sentiment. However, they also introduce new complexities, including regulatory uncertainty and the potential for market manipulation in low-liquidity scenarios.

The accuracy of prediction markets is often attributed to the "wisdom of the crowd," but this logic holds only when sufficient liquidity and transparency are present. As seen with platforms like Polymarket and Kalshi, high-liquidity events tend to yield more accurate outcomes, while smaller or less active markets can be prone to volatility and bias according to PR Newswire.

Investors are also keeping a close eye on how new regulations may shape the space. With the U.S. Congress preparing to finalize a digital asset market structure bill, the outcome could determine whether prediction markets remain a niche product or evolve into a core part of the broader financial system according to Finance Feeds.

As the industry continues to mature, exchanges like Crypto.com, Coinbase, and KuCoin will likely play key roles in shaping how prediction markets are integrated into the financial ecosystem.