• Coinbase is preparing to launch a prediction market powered by Kalshi, allowing crypto customers to trade on outcomes of events such as elections and sports.
  • The platform will leverage Kalshi's CFTC-regulated infrastructure and USDC stablecoins managed via Coinbase Custody.
  • The move represents a significant expansion of Coinbase's product suite beyond traditional crypto trading into regulated event contracts.

Coinbase is preparing to launch a prediction market that will enable its cryptocurrency clients to place bets on everything from political elections to sporting events, according to two people familiar with the matter. The new offering will be powered by prediction market specialist Kalshi, marking a strategic expansion beyond the exchange's core digital asset trading business.

The partnership leverages Kalshi's existing regulatory framework as a CFTC-regulated prediction market exchange, combined with Coinbase's extensive customer base and custody infrastructure. Event contracts traded on the platform will be settled using USDC stablecoins managed through Coinbase Custody, creating an integrated ecosystem that bridges traditional financial oversight with crypto-native settlement mechanisms.

Efforts to bring prediction markets to mainstream financial audiences have historically faced regulatory hurdles in the United States, where event-based trading occupies a complex legal landscape. Kalshi's existing CFTC oversight provides a crucial foundation for the venture, though sources indicate both companies are proceeding cautiously given the sensitivity around political betting markets.

"This represents a natural evolution for both platforms," said one source briefed on the partnership discussions, who asked not to be identified because the details aren't public. "Coinbase gains access to a new asset class while Kalshi taps into a massive, crypto-savvy user base."

Coinbase and Kalshi representatives declined to comment when reached Thursday afternoon. The timing of the official launch remains unclear, though development work is reportedly well underway.

The move follows Coinbase's broader strategy to diversify revenue streams beyond spot trading, which has proven vulnerable to crypto market cycles. Recent consensus estimates project year-over-year revenue increases for Coinbase in 2025 and 2026, though earnings per share projections suggest the company remains in a volatile adjustment period typical for high-growth fintech operators.

Prediction markets have historically struggled to gain mainstream acceptance in the U.S. financial system, with previous attempts like InTrade faltering amid regulatory challenges. The Coinbase-Kalshi partnership represents the most significant effort to date to bring event contracts to a mass audience through regulated channels, potentially establishing them as a legitimate asset class.

Industry observers note that while the AWS outage on October 20, 2025, temporarily affected Coinbase's operations, it didn't impact the prediction market rollout timeline. The companies appear focused on building a compliant, institutionally-viable platform rather than rushing to market.

As regulatory scrutiny around crypto intensifies, the partnership's emphasis on working within existing frameworks—rather than challenging them—could set a precedent for how established crypto companies expand into adjacent financial services.