Coinbase moves to list its own prediction market contracts after topping $200m run rate

Coinbase reported that its prediction markets business exceeded $200m in annualised revenue in the third quarter, the company said in its Q3 earnings filing on Thursday. That run rate rose from more than $100m in the second quarter. CEO Brian Armstrong said Coinbase "got CFTC approval to list our own prediction market contracts now, which will improve our economics."

CFTC approval and clearing capability

According to filings with the Commodity Futures Trading Commission (CFTC), Coinbase Clearing LLC received approval as a Derivatives Clearing Organization (DCO) on 28 September 2026. The DCO registration permits Coinbase Clearing to clear fully collateralised futures, options on futures and swaps, per the CFTC registration order. The company added in the filing that it is "building toward USDC-native, inhouse clearing and end-to-end infrastructure."

Coinbase Financial Markets, a futures commission merchant (FCM) registered with the CFTC, currently routes customer orders to the designated contract market (DCM) of Kalshi, which lists the contracts and charges exchange fees. The DCO permission, combined with the ability to list its own contracts, would allow Coinbase to execute prediction market trades end-to-end, retain the exchange fees it currently pays to Kalshi and settle contracts in USDC. Armstrong did not specify a launch date for Coinbase-listed contracts.

Key third-quarter numbers

The main Q3 metrics, per Coinbase’s earnings presentation and 10-Q, were:

• Total revenue: $1.22bn, flat quarter-over-quarter and -35% year-over-year

• Net income: $718.7m, or $2.51 per diluted share, versus a loss of $359.5m in Q2; +66% year-over-year

• Adjusted EBITDA: $332.9m, +60% q/q and -58% y/y

• Transaction revenue: $590.2m, -1% q/q and -44% y/y

• Subscription and services revenue: $570.2m, +3% q/q and -20% y/y

• Prediction markets: more than $200m in annualised revenue in Q3, versus more than $100m in Q2; daily traders + more than 60% q/q

• Crypto trading volume market share: 10.7%, from 10.3% in Q2 and 5.6% a year earlier

• Monthly transacting users: 7.4 million, from 9.3 million a year earlier

CFO Alesia Haas said in the filing that transaction expenses reached 17% of net revenue, "with growth in prediction markets increasing the contribution from associated exchange fees." Haas also said that predictions and derivatives together "contributed 25% of transaction revenue." Adjusted net income was $77.7m.

Rivals and parallel moves: Robinhood and Rothera

Robinhood is following a similar path. Its joint venture with Susquehanna International Group, Rothera, handled 3.4 billion contracts in Q3 and exceeded $100m in annualised revenue in its first full quarter. Robinhood reported $173m in prediction market revenue for the quarter, which equates to roughly $690m annualised — about three times the run rate Coinbase disclosed.

CFO Jason Verma said Rothera will be Robinhood’s "primary exchange," with Crypto.com/OG.com as its "main second exchange." Verma added that Robinhood held equity positions in Crypto.com and OG.com that could grow to 10% with volume. CEO Vlad Tenev said: "I don't think we can send all of our flow to one venue." Coinbase has not said whether it will continue routing orders to Kalshi once its own contracts are active. Both changes will affect Kalshi; Robinhood accounted for more than half of Kalshi’s volume at the end of 2025, and Coinbase has not disclosed its share.

Volume composition and state regulatory actions

Haas reported that daily traders in prediction markets grew by more than 60% from the prior quarter and that in Q3 "more than 50% of contracts traded were non-sports." Armstrong said the business grew "even through slower months around sports," driven by "crypto contracts, where we have a strong right to win." Coinbase added price contracts of 15 minutes and one hour on 10 crypto assets on 6 October.

Contract mix matters because sports contracts have lost ground in state courts. Federal judges in Michigan and Connecticut denied the company injunctive relief to block state enforcement in August, and Coinbase agreed to withdraw its sports contracts from Michigan while it appeals. On 25 September, the Sixth Circuit rejected Kalshi’s claim that sports contracts are swaps under the CFTC’s exclusive jurisdiction. Coinbase also withdrew contracts from Nevada after a preliminary injunction granted in March by a Carson City judge in favour of the Nevada Gaming Control Board. State regulators argue the contracts are unlicensed sports betting; Coinbase and Kalshi argue they are derivatives under federal regulation. The dispute is likely headed to the Supreme Court.

Financial guidance and marketing spend

Coinbase guided fourth-quarter subscription and services revenue between $550m and $630m, and adjusted operating expenses between $1.007bn and $1.157bn. The company said transaction revenue through 25 October was about $165m. Haas said spending would include "discretionary marketing investments in products like prediction markets, where we see strong demand and growth." Before the release, shares closed at $160.59.

Coinbase agreed in December to acquire The Clearing Company, a startup founded by Toni Gemayel, the former head of growth at Polymarket and Kalshi. That deal is part of the roadmap to run inhouse clearing and list its own contracts.

"Got CFTC approval to list our own prediction market contracts now, which will improve our economics," Brian Armstrong said.

"Transaction expenses reached 17% of net revenue," Alesia Haas said.