Can Prediction Markets Power Coinbase Global's Next Phase of Growth?

For Coinbase Global COIN, prediction markets are emerging as a new growth pillar, expanding the company’s addressable market and accelerating its transition into an “everything exchange.” Coinbase entered the prediction-market space in November 2025 through a partnership with Kalshi, a regulated U.S. exchange that enables users to trade on outcomes of real-world events, including elections, inflation, sports and scientific developments.

Prediction-market volumes have surged amid rising retail participation, sports-related activity, political events and demand for real-time information. As event contracts can generate trading activity regardless of cryptocurrency-market direction, they could reduce Coinbase’s dependence on crypto trading volumes, which remain highly correlated with asset prices.

Prediction markets also reinforce Coinbase’s “everything exchange” flywheel. Through a single account, customers can hold cash and USDC, trade cryptocurrencies, equities and derivatives, and express views on real-world outcomes.

To strengthen its position, Coinbase acquired The Clearing Company, a prediction-market specialist, bringing dedicated product and growth expertise in-house. The acquisition should accelerate Coinbase’s product roadmap and support the development of regulated, scalable prediction-market infrastructure, rather than leaving the company solely dependent on third-party distribution.

Although still at an early stage, prediction markets provide Coinbase with an attractive entry into the fast-growing event-based trading market. Over time, the segment could increase trading frequency, diversify revenues, improve customer retention and establish Coinbase as a single destination for multiple financial markets.

What About COIN’s Peers?

Robinhood Markets HOOD stays focused on accelerating growth through rapid product innovation and global expansion. Robinhood has been engaging in opportunistic acquisitions to deepen its footprint and expand its product reach within the United States and globally. Robinhood also noted that AI features and fast rollouts are increasing engagement, premium monetization and retention, while stronger tools attract both retail and advanced traders. 

Interactive Brokers IBKR continues to explore growth opportunities in the emerging markets of Taiwan, Mexico and India. Given the rapid growth of its European business, Interactive Brokers has substantially expanded its operations there. Interactive Brokers has been undertaking several measures to enhance its global presence.

COIN’s Price Performance

Shares of COIN have lost 34.9% in the year-to-date period, underperforming the industry.

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COIN’s Expensive Valuation

COIN trades at a price-to-earnings ratio of 67.03, significantly above the industry average of 16.69.

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Estimate Movement for COIN

The Zacks Consensus Estimate for COIN’s third-quarter and fourth-quarter 2026 earnings per share (EPS) witnessed southbound movement in the last 30 days. The same holds true for 2026 and 2027.

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The consensus estimates for COIN’s 2026 revenues and earnings indicate year-over-year decreases. Nonetheless, the consensus estimates for 2027 revenues and earnings imply year-over-year increases.

COIN stock currently carries a Zacks Rank #5 (Strong Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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