- Two companies already have a relationship.
- Coinbase expected to reveal prediction market plans next week.
- Partnership could be similar to Kalshi/Robinhood.
When it launches it prediction markets platform, which could occur imminently, Coinbase Global (NASDAQ: COIN) appears likely to partner with Kalshi.
Jane Wong, a Silicon Valley blogger and consultant who broke the news that Coinbase is working on an event contracts platform, obtained what appears to be a slide from a yet-to-be released Coinbase investor presentation. It includes a disclaimer box mentioning a relationship with Kalshi.
Coinbase is subject to US regulatory oversight by the Commodities Futures Trading Commission (CFTC). Prediction Markets are offered by Coinbase Financial Markets through KalshiEX LLC,” according to the cryptocurrency broker’s presentation.
Last month, Coinbase and Kalshi announced a relationship in which the former custodies the stablecoin USDC on behalf of the prediction markets operator. Reports surfaced Thursday that Coinbase could publicize its event contracts plans as soon as next week.
Coinbase Partnership Jibes with Kalshi’s Crypto Efforts
Not yet as crypto-centric as rival Polymarket, Kalshi has made clear it wants to be the prediction market of choice for the digital currency community.
“6 months for Kalshi to be in every major crypto app or I have failed at my job,” said Kalshi Head of Crypto John Wang in a new post on X.
Those ambitions and the potential partnership with Coinbase arrive as the prediction market arena’s ties to cryptocurrency are growing. Crypto.com and Polymarket are two of the established players in the space while Robinhood Markets (NASDAQ: HOOD), which offers crypto trading, has a long-standing relationship with Kalshi and accounts for an estimated 25% to 35% of that exchanges volume.
Adding the crypto/prediction markets intersection, Gemini Space Station’s (NASDAQ: GEMI) Gemini Titan unit earlier this week won approval from the CFTC to offer yes/no event contracts to clients.
Why Coinbase Relationship Is Important to Kalshi
Assuming a Coinbase/Kalshi partnership comes to fruition, it’s important to the prediction market operator on multiple fronts, including the points that the crypto broker has 105 million global accounts and 10.8 million monthly active users.
Additionally, the partnership could ease the sting of possibly losing business from Robinhood. Last month, the popular trading platform announced it is partnering with market maker Susquehanna International Group to offer what amounts to be its own prediction markets platform.
Robinhood has implied it will still work with Kalshi, but for how long that partnership lasts now that the former is a competitor to the latter remains to be seen. Under the two sides’ original agreement, Kalshi provided Robinhood with event contracts to offer its clients with the broker’s customers essentially acting as liquidity providers and volume enhancers.
The two companies equally split the economics of that arrangement and while it’s not clear if it will dissolve outright, Kalshi’s relationship with Coinbase could offset some of the company’s Robinhood-related risk.
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