TLDR
- Coinbase launched prediction market trading nationwide through partnership with Kalshi
- Users can bet on sports games, election results, economic data, and cultural events
- Kalshi holds federal CFTC regulation but battles state-level gaming license requirements
- The move supports Coinbase’s goal of becoming a multi-asset “everything exchange”
- Launch comes one week before Super Bowl, one of America’s most-watched sporting events
Coinbase activated prediction market trading for all US users on Wednesday. The crypto exchange partnered with Kalshi to deliver the nationwide service.
The platform lets traders bet on real-world outcomes. Sports results, political races, and economic indicators are all available for trading.
Coinbase announced the Kalshi collaboration in December. The company confirmed full availability across all 50 states this week through social media.
The rollout happens right before the Super Bowl. That gives users immediate access to one of the year’s biggest betting opportunities.
Kalshi operates as a federally regulated derivatives exchange. The Commodity Futures Trading Commission oversees the platform’s operations.
How Event Contracts Work
Kalshi uses yes-or-no contracts tied to specific outcomes. Each contract has two sides that traders can buy.
The price reflects market sentiment about probability. A contract trading at 70 cents suggests the market believes there’s a 70% chance of that outcome.
Traders profit when they correctly predict outcomes. Wrong predictions result in losses up to the amount paid for the contract.
Coinbase completed its acquisition of The Clearing Company last month. That purchase laid groundwork for the prediction market expansion.
State Regulators Push Back
Four states filed legal action against Kalshi. Massachusetts and Tennessee lead the group challenging the platform.
State authorities claim Kalshi needs gaming licenses for sports betting. The platform currently operates without state-level gambling approvals.
Federal regulation from the CFTC doesn’t satisfy state requirements. Each state maintains independent gaming laws that apply within their borders.
Polymarket faces identical challenges in Tennessee. State regulators argue prediction markets on sports constitute illegal gambling without proper licenses.
Congress also scrutinized Polymarket recently over insider trading concerns. One user earned over $400,000 betting on the capture of Nicolas Maduro.
Lawmakers questioned whether the trader possessed advance information. The incident sparked calls for tighter rules on political betting markets.
Building the Multi-Asset Platform
Coinbase describes its expansion as creating an “everything exchange.” The vision includes crypto, stocks, tokenized real-world assets, and prediction markets.
Prediction market volume exploded in the past year. Polymarket processed billions in trades as users bet on elections and major events.
These platforms provide instant sentiment readings on current events. Traders and analysts use them as alternative data sources.
Coinbase adds legitimacy through its regulated status and brand recognition. The exchange already serves millions of Americans for crypto transactions.
Those existing customers gain automatic access to Kalshi contracts. No separate account creation or verification is required.
The company valued Kalshi at $11 billion in recent funding rounds. That valuation reflects growing investor interest in prediction market platforms.
Coinbase’s entry could accelerate mainstream adoption of event contracts. The exchange brings distribution power and regulatory credibility to the sector.
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