Coinbase launches new Kalshi-powered prediction markets in the US
Cryptocurrency exchange Coinbase has launched its Kalshi-powered prediction market nationwide for US customers.
The feature, initially rolled out in a limited capacity, is available to users in all 50 states. Through the partnership with Kalshi, which operates as a US exchange regulated by the Commodity Futures Trading Commission, users can wager on all of Kalshi’s event contracts, including sports, politics, and culture.
Coinbase users will be able to use either cash or Circle stablecoin from their Coinbase accounts to trade on Kalshi’s markets, according to Decrypt.
The contracts differ from those of sportsbooks and casinos, as users take positions against each other rather than betting against the house. This has so far allowed them to avoid applying for state gambling licenses.
Coinbase Chief Executive Brian Armstrong posted on X regarding the launch, “Prediction markets are the ultimate form of truth-seeking. When there’s skin in the game, the output is far more reliable. Everything else is biased by someone’s agenda. I think we’ll look back at prediction markets as a breakthrough in how we discover truth in the world.”
This nationwide launch marks a significant expansion of Coinbase’s services beyond its core cryptocurrency exchange offerings, despite regulatory backlash that prediction market operators have faced in recent months.
Kalshi has been facing lawsuits across the US as states attempt to ban its product. However, despite receiving a court order from a Massachusetts Superior Court judge to stop offering sports-event contracts, the order was put on hold only days after the ruling.
Abi Bray brings strong researching skills to the forefront of all of her writing, whether it’s the newest slots, industry trends or the ever changing legislation across the U.S, Asia and Australia, she maintains a keen eye for detail and a passion for reporting.
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The Backstory
Why this nationwide rollout matters
Coinbase’s decision to open Kalshi-powered prediction markets to users in all 50 states caps months of positioning and accelerates a regulatory fight that now spans courts, statehouses and Washington. The product lets customers trade event contracts on politics, sports and economic data through a federally regulated exchange rather than a sportsbook, a distinction central to how the companies aim to avoid state gambling regimes. The launch widens Coinbase’s footprint beyond crypto while testing whether event trading can move from niche to mainstream under commodity rules.
That bet arrives as state attorneys general and gaming regulators try to assert jurisdiction over event contracts they view as sports betting by another name. Kalshi has faced lawsuits and orders in multiple states, and a Massachusetts judge’s directive to halt sports-event markets was quickly put on hold, underscoring the fluid legal terrain. Coinbase’s scale, marketing reach and fiat on-ramps raise the stakes for an industry that argues price signals on future events serve a public purpose and should sit with federal market overseers.
From teaser to launch: Coinbase’s “everything app” push
The move was telegraphed in December when Coinbase prepared to showcase prediction markets alongside tokenized equities as part of its next product wave. Executives had previewed ambitions to become an “everything app” for tradable risk, positioning event contracts as a natural adjacency to crypto spot and derivatives. Screenshots circulating on social media pointed to a functioning app experience ahead of the event, signaling how far along the work had gotten before the company flipped the switch nationwide. For context on that roadmap, see coverage that Coinbase planned to announce the prediction market launch and tokenized equities.
Coinbase isn’t alone. Rivals have sought federal permissions to compete in event markets, including Gemini, which obtained a designated contract market license after a five-year process. Robinhood integrated Kalshi earlier, testing user appetite for event trading inside a retail brokerage interface. The convergence of crypto, brokerage and federally supervised event contracts sets up new distribution races and business-model questions as firms decide whether to build in-house or partner with regulated exchanges.
A stress test for market integrity
The mechanics of prediction markets have already drawn scrutiny. In a high-profile demonstration, Coinbase Chief Executive Brian Armstrong gamed “mention” contracts tied to the company’s earnings call by deliberately saying words tracked by competing platforms, triggering payouts and revealing how a motivated actor can steer outcomes. The incident, first reported by Bloomberg and summarized here, is detailed in coverage of Armstrong’s on-air experiment.
While Kalshi said mention markets were a tiny slice of volume, the episode spotlights a core regulatory test: whether listed contracts are “readily susceptible to manipulation.” That standard goes to the heart of federal oversight for event-based derivatives. Coinbase has said staff are barred from participating in prediction markets, but the call stunt arms critics who argue some contracts are inherently self-referential or too easy to sway. As Coinbase now funnels broad retail access to Kalshi, questions about contract design, surveillance and enforcement will grow louder.
Regulation by lawsuit: the federal-state collision
The legal backdrop has hardened since the summer. States including Connecticut, Illinois and Michigan have moved to rein in event markets, often by treating them as unlicensed gambling. In response, Coinbase sued three states, arguing they lack authority to regulate a federally supervised exchange product and warning that a patchwork regime invites offshore migration. The company’s argument and the breadth of state actions are laid out in reporting on Coinbase’s lawsuits against Michigan, Illinois and Connecticut.
Kalshi has been a primary target, with Massachusetts’ case over sports-event contracts emblematic of the clash. The states’ moves complicate compliance for platforms that serve nationwide user bases and want to avoid 50 sets of rules. Whether courts side with a federal-first approach for event contracts could define the market’s addressable reach in the United States. Coinbase’s entry all but guarantees that legal theories will be tested quickly given its visibility and user count.
Industry fronts unite as adoption builds
Sensing the need for a single message, Kalshi and Crypto.com convened the Coalition for Prediction Markets with Coinbase, Robinhood and Underdog to push for federal oversight and harmonized standards. The group cites rising adoption and billions in cumulative trading volume while warning that state-by-state reinterpretations create uncertainty and drive users offshore. Early priorities include integrity safeguards, insider-trading protections and consistent compliance rules. The coalition’s launch and arguments are detailed in Inside Asian Gaming’s report on the industry advocacy effort.
The coalition reflects an alignment of interests across crypto exchanges and retail brokerages that see event markets as both a revenue stream and a differentiating feature. It also signals a willingness to coordinate legal and policy campaigns rather than fight state actions piecemeal. How effectively the coalition can translate industry standards into regulator comfort will influence which contracts get listed and how quickly new categories come online.
Competitive stakes and user wallets
Even as Coinbase takes the headline with a nationwide launch, competitors may capture more incremental revenue. A survey by Mizuho suggests Robinhood is better positioned because its users plan to fund event trading with new deposits rather than selling existing holdings. Coinbase users, by contrast, are more likely to sell crypto to participate, which could mute net revenue gains. The dynamic is outlined in analysis of why Robinhood may benefit more from prediction markets than Coinbase.
That split matters for how investors model the opportunity. If Robinhood attracts fresh capital for event contracts, it can grow assets and engagement without cannibalizing core trading. Coinbase’s upside may hinge on expanding the user base beyond crypto natives or on cross-selling other products to offset any substitution. Both firms are likely to push economic and political event markets, where survey respondents showed the most interest, while calibrating risk controls around sports.
What comes next
With Coinbase now routing users into Kalshi, several threads converge. Regulators will parse whether certain contracts meet federal standards for manipulation resistance. State attorneys general will continue to test jurisdictional theories. Industry groups will try to lock in a federal framework before fractured rules take hold. And platforms will chase distribution advantages while tuning integrity safeguards.
The next milestones include court rulings in state challenges, potential federal guidance on contract types, and the pace of retail adoption as app integrations deepen. Coinbase’s launch turns an abstract policy fight into a live-market reality, forcing answers to who regulates event trading, how far the product can reach and which players will capture the most value as prediction markets try to go mainstream in the US.
