Coinbase’s Latest: Prediction Markets And Stock Trading Added To Platform

Coinbase (COIN) revealed on Wednesday its plans to roll out a suite of new products intended to transform the platform into a comprehensive financial application, including the addition of stocks, advanced trading tools, and prediction markets.

Brian Armstrong’s Vision

CEO Brian Armstrong envisions his platform as the go-to destination for a diverse range of trades, including stocks, streamlined futures, and perpetual contracts, as well as prediction markets through its partnership with Kalshi. 

The prediction market remains defined by Kalshi and Polymarket. However, Armstrong emphasized that the appeal of prediction markets extends beyond mere trading.

“When looking at economic indicators or elections, people utilize prediction markets to gauge what might happen next month,” he explained in an interview with CNBC. 

“While only about 1% of users approach it as an asset class for trading, a striking 99% leverage it to obtain insights—almost as an alternative to traditional media or entertainment,” Armstrong further explained.

Recently, Robinhood (HOOD) has demonstrated a similar trajectory by broadening its prediction markets into sports-style contracts resembling parlays and prop bets, marking this category as one of its fastest-growing revenue streams. 

New Outcome Trading And Tokenization Strategy

Coinbase also aims to introduce its form of outcome trading into a wider ecosystem, betting on the future of brokerage services as a unified platform blending traditional assets, derivatives, and blockchain capabilities.

This trading expansion is closely linked to the cryptocurrency exchange’s tokenization strategy, which aims to bring more traditional assets onto the blockchain, including equities. 

The company is launching “Coinbase Tokenize,” an institutional-grade infrastructure designed to support the tokenization of real-world assets (RWAs). Armstrong sees this expansion as a stepping stone toward a more significant goal. 

“Trading stocks is a good starting point,” he noted, adding that the ultimate aim is to facilitate the trading of tokenized equities. Achieving this, according to him, could democratize access for individuals globally and unlock new structures in the US market, enhancing professional futures tied to equity trading.

For businesses and developers, Coinbase is broadening its appeal beyond retail trading; the company has announced that Coinbase Business will now be accessible to eligible customers in the US and Singapore, along with an expanded API suite encompassing services like custody, payments, trading, and stablecoins.

Armstrong articulates a broader thesis: crypto is not merely a niche but rather a vital upgrade to the entire financial system. He asserts that all major asset classes, including prediction markets, equities, commodities, and, eventually, real-world assets like real estate, will transition to blockchain systems. 

Additionally, Coinbase plans to introduce “custom stablecoins” for companies that require branded stablecoin solutions, while also highlighting its x402 payments standard, which aims to simplify stablecoin payments associated with web requests.

Featured image from DALL-E, chart from TradingView.com