Coinbase (COIN) Stock: Exchange Debuts Prediction Markets Nationwide via Kalshi Deal

TLDR

• Coinbase partnered with Kalshi to offer prediction markets in every US state
• Platform enables trading on sports outcomes, political events, and cultural happenings
• Kalshi is federally regulated but faces state legal challenges over sports betting licenses
• Launch positions Coinbase as an “everything exchange” with diverse trading options
• Timing aligns with upcoming Super Bowl, giving users betting opportunities on major events

Coinbase unveiled prediction market trading across all 50 states on Wednesday. The feature launches through a collaboration with Kalshi, a prediction market operator regulated by federal authorities.

Users can now trade on outcomes ranging from NFL games to presidential elections. The platform also covers cultural events, collectibles, and economic data releases.

Coinbase first announced the Kalshi partnership in December. The full nationwide rollout happened this week via an X post from the exchange.

Coinbase Global, Inc., COIN

The timing works well for Coinbase. The Super Bowl arrives in roughly one week, giving users a high-profile event to trade on right away.

Trading Real-World Events

Kalshi’s model uses yes-or-no contracts on specific outcomes. Traders pick a side and the contract price shows what the market thinks will happen.

Higher prices mean the crowd believes that outcome is more likely. Lower prices suggest skepticism from other traders.

The Commodity Futures Trading Commission regulates Kalshi at the federal level. This oversight allows the platform to operate as a derivatives exchange in the United States.

Coinbase acquired The Clearing Company last month. That purchase supports the exchange’s expansion into prediction markets and alternative trading products.

State Legal Battles

Kalshi faces lawsuits from at least four state governments. Massachusetts and Tennessee filed cases claiming the platform needs gaming licenses for sports betting.

The state actions continue despite Kalshi’s federal regulatory approval. Each state maintains separate gambling and gaming laws that may conflict with federal oversight.

Polymarket deals with similar legal pressure. Tennessee authorities took action against Polymarket over sports betting operations without state licenses.

Insider Trading Questions

Polymarket recently caught heat from Congress over potential insider trading. One user reportedly made over $400,000 betting on the capture of Venezuelan President Nicolás Maduro.

The user’s timing raised red flags with lawmakers. They questioned whether the trader had advance information about the operation.

Members of Congress demanded action on insider trading rules for political prediction markets. The incident highlighted gaps in oversight for these platforms.

The Everything Exchange Vision

Coinbase calls its expansion strategy the “everything exchange” approach. The company wants to offer stocks, crypto, tokenized assets, and now prediction markets under one roof.

Prediction market activity jumped over the past year. Platforms like Polymarket saw huge volume increases as users traded political and economic events.

These markets give real-time sentiment readings on current events. Some traders use them as data sources alongside traditional news and polling.

Coinbase brings its regulated infrastructure and existing user base to the prediction market space. The exchange could add liquidity and mainstream visibility to the sector.

The platform already serves millions of US customers for crypto trading. Those users now have access to Kalshi’s event contracts without opening separate accounts.

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