A source informed CNBC that Coinbase is preparing to open an in-house prediction market, which is a Kalshi-based source is close, a strategic move to increase the number of asset classes offered on the cryptocurrency exchange, when some investors are becoming hesitant to invest in digital assets.
The source indicated that the prediction market is going to be officially announced by Coinbase and Kalshi soon, and the news might be published as early as next week.
According to the source, the partnership is not exclusive, but the only prediction markets operator to collaborate with Coinbase will be Kalshi at the moment of the product launch.
Therefore, the prediction market launch has been rumoured for almost an entire month. A purported screenshot of the Coinbase dashboard prediction markets, which Silicon Valley researcher Jane Manchun Wong shared on X (formerly known as Twitter) on November 18, provided some hints regarding the new product.
The Information was among the first to cover that Coinbase would roll out predictive markets based on Kalshi on November 19, and the exchange would announce the new product at its “Coinbase System Update” event on December 17.
A similar report was published by Bloomberg on Thursday, which also refers to a source knowledgeable of the issue, but Coinbase was also going to announce an offering of tokenized stock at the showcase.
However, Coinbase refused to verify the claims with CNBC, although it told it to watch its event next week. The company made no remarks on the timeline for launching its prediction markets to its users.
The new product releases that Coinbase is currently undertaking highlight its efforts to transform itself into an “everything exchange,” or a one-stop financial platform to trade all types of assets, including crypto tokens, tokenized stocks, and event contracts.
CEO Brian Armstrong described in May the vision of everything exchange to investors, with the company seeking to be a leading financial services application in the upcoming decade.
The trading platform is already aiming towards that objective since it is experiencing stiff competition with other competitors like Robinhood, Gemini, and Kraken.
All three have already introduced tokenized equity offerings to non-U.S. users in the last year, as well as experimenting with prediction markets to different degrees.
Coinbase also makes steps to diversify the number of financial products it offers to its clients as the mood towards digital assets among investors cools down.
A series of liquidations of over-levered digital asset positions in mid-October caused multiple pullbacks in the crypto market, with investors shifting out of tokens and into gold and other safe-haven assets.
Bitcoin dropped to a low of approximately $85,000 in early December, its lowest point since March of this year. The token was last trading at $89,951, declined 23 percent in the past three months.
Coinbase has declined by a greater margin of more than 16 percent in the last three months. The agreement also highlights the Kalshi move to integrate its event contracts into more and more brokerages as the prediction markets field continues to get competitive.
Kalshi launched a number of its prediction markets into the trading platform Robinhood, as part of a non-exclusive collaboration between the companies in the current year.
A source familiar with the matter reported to CNBC that Kalshi also held discussions with other significant brokerages, including crypto industry companies, with the prospect of striking similar deals as the one it has reached with Robinhood and now Coinbase.
