Coinbase, the largest cryptocurrency exchange in the United States, is preparing to launch prediction markets and tokenized equities, while Gemini has secured regulatory approval. Kalshi and Crypto.com have formed an industry coalition, and Binance’s Changpeng Zhao is targeting 220 million users through the BNB Chain. The war among giants for the throne of the $15 billion prediction market has officially begun.
Coinbase Reveals Key Card in “Everything App” Strategy
Coinbase reportedly plans to officially announce prediction markets and tokenized equity services at a showcase on December 17. Notably, these tokenized stocks will be launched in-house, showcasing Coinbase’s commitment to expanding its offerings without needing partner platforms.
In recent weeks, expectations have been heightened by screenshots hinting at related functionality circulating on social media platform X. While a Coinbase spokesperson refrained from providing detailed information, they encouraged interested parties to “tune in to the livestream on Dec. 17 to find out what new products Coinbase is shipping.”
This initiative aligns with Coinbase’s overarching “everything app” strategy, aimed at providing traders access to a broad range of assets while maintaining competitiveness with rivals like Robinhood and Kraken, both of which offer tokenized US stocks and ETFs globally.
The market for tokenized equities is burgeoning, with reports from rwa.xyz indicating a monthly transfer volume surge of 32%, totaling $1.45 billion.
Industry Coalition CPM Launches: “A Unified Voice Is Necessary”
Simultaneously, Kalshi and Crypto.com announced the establishment of the Coalition for Prediction Markets (CPM). This national alliance comprises prediction market operators, with Coinbase, Robinhood, and the sports gaming platform Underdog among its founding members.
Matt David, executive board member of CPM, emphasized the necessity of a unified voice within the industry, stating: “The US is the biggest frontier for prediction markets, and the momentum we’re seeing makes a unified industry voice not just important, but necessary.”
The coalition aims to strengthen federal frameworks for prediction markets, establish nationwide integrity standards to combat insider trading, and counteract state-level regulatory overreach—a crucial step for the future of prediction markets.
Sara Slane, head of corporate development at Kalshi and a coalition executive, noted the years spent collaborating with the CFTC to ensure robust federal safeguards, stating, “Prediction markets must operate with strong protections that prevent insider trading and protect consumers.” Further discussions indicate that other companies are considering joining this coalition.
Gemini Secures CFTC Approval, Shares Surge 28%
The Winklevoss twins-founded exchange, Gemini, has also entered the fray by securing approval from the Commodity Futures Trading Commission (CFTC). This milestone allows Gemini Space Station Inc. to offer event contract trading services to existing US customers via its website and mobile application.
In regulatory filings for its IPO, Gemini included prediction markets focused on “economic, financial, political, and sports forecasts” as integral to its product lineup. The company plans to expand its derivatives offering for US customers to potentially include crypto futures, options, and perpetual contracts. Following the announcement, Gemini shares surged as much as 28% during extended trading hours.
This approval is reflective of broader agency actions under Acting Chairman Caroline Pham, who has been a notable advocate for the digital assets industry, promoting the advancement of crypto trading on CFTC-regulated platforms. Pham’s initiatives include the appointment of Tyler Winklevoss to the agency’s CEO Innovation Council, alongside leaders from various sectors within the industry.
CZ Marches to the Center Stage of Prediction Markets
Binance founder Changpeng Zhao (CZ) is expanding his influence in the prediction market domain. On December 4, CZ announced the launch of a new prediction market on the BNB Chain, featuring a unique design where user funds can generate yield while waiting for outcomes. This platform is supported by YZiLabs (formerly Binance Labs), an entity managing over $10 billion in assets and having invested in more than 300 projects globally.
Just the day before, Trust Wallet, owned by CZ, introduced its Predictions feature, partnering with Web3 prediction market protocol Myriad. This integration allows users to engage in betting on various topics, including politics, sports, and market trends through the app, now serving a user base of 220 million.
In an exciting move, BNB Chain completed its integration with Polymarket in October. Additionally, Opinion Labs, another prediction market provider backed by YZiLabs, launched its mainnet after securing substantial investment during Binance Blockchain Week, showcasing the growing financial confidence in this sector.
Interestingly, the Trump Media & Technology Group, the social media platform of former President Donald Trump, plans to enter the prediction market scene as well. They are set to launch “Truth Predict” on its Truth Social platform, focusing on wagers related to political elections and inflation trends.
Truth Predict will utilize Crypto.com Derivatives North America for processing bets, targeting a diverse array of events spanning prominent sports leagues and commodity prices, with initial testing slated to commence shortly.
The Race for the $15 Billion Throne
The prediction market landscape is thriving, especially post a federal court’s dismissal of the ban on election betting last year. Trading volumes on platforms like Polymarket and Kalshi have not only rebounded but surpassed records set during the previous US presidential election.
Investor enthusiasm is climbing significantly, with Kalshi achieving a more than double valuation to reach $11 billion following its recent funding round. Meanwhile, Polymarket is reportedly positioning to raise capital at a staggering valuation of up to $15 billion.
Moreover, traditional financial exchanges such as CME Group and Intercontinental Exchange are exploring opportunities to tap into this lucrative market. Recent data indicates that monthly transfer volumes for tokenized equities have seen a remarkable 32% increase, reaching $1.45 billion.
Nonetheless, regulatory challenges loom large. Kalshi filed a lawsuit against New York’s gaming commission last October, asserting that the agency is overstepping its jurisdiction in regulating operations traditionally governed at the federal level. Furthermore, sports betting remains illegal in several states, exacerbating the uncertainty surrounding the legality of prediction markets.
With Coinbase, Gemini, CZ’s BNB Chain, and the newly established industry coalition all vying for dominance, the battle for the $15 billion prediction market throne is just beginning.