Coinbase to list its own prediction contracts after Q3 run rate tops $200m

Coinbase's prediction markets business reached an annualised revenue run rate above $200m in the third quarter, the company said in its Q3 earnings presentation on Thursday, 29 October 2026. CEO Brian Armstrong told investors Coinbase "got CFTC approval to list our own prediction market contracts now, which will improve our economics." Commodity Futures Trading Commission filings show Coinbase Clearing LLC received approval as a Derivatives Clearing Organization on 28 September 2026. Armstrong did not give a launch date for Coinbase-listed contracts.

Q3 headline figures and prediction markets detail

Coinbase reported total revenue of $1.22bn for Q3, flat quarter-over-quarter and down 35% year-over-year. Net income was $718.7m, or $2.51 per diluted share, compared with a $359.5m loss in Q2 and a 66% year-over-year increase. Adjusted EBITDA was $332.9m, up 60% quarter-over-quarter and down 58% year-over-year.

Transaction revenue totalled $590.2m, down 1% quarter-over-quarter and 44% year-over-year. Subscription and services revenue was $570.2m, up 3% quarter-over-quarter and down 20% year-over-year. The company reported monthly transacting users of 7.4 million, down from 9.3 million a year earlier, and a crypto trading volume market share of 10.7%, up from 10.3% in Q2 and 5.6% a year earlier.

Prediction markets moved materially inside the revenue mix: Coinbase said prediction markets produced more than $200m in annualised revenue in Q3, up from more than $100m in Q2, and that daily traders were up more than 60% quarter-over-quarter. CFO Alesia Haas said prediction markets and derivatives together "contributed 25% of transaction revenue." Haas added that prediction markets revenue has compounded 82% per quarter since launch.

Clearing approval and vertical integration

The CFTC registration order for Coinbase Clearing LLC gives the unit DCO status and allows it to clear fully collateralised futures, options on futures, and swaps. That approval, dated 28 September 2026, lets Coinbase clear and settle derivatives directly. In the presentation Armstrong said the company is "building toward USDC-native, inhouse clearing and end-to-end infrastructure."

Coinbase Financial Markets, which is registered with the CFTC as a futures commission merchant, currently routes customer orders to Kalshi's designated contract market, which lists the contracts and charges exchange fees. By listing its own contracts and combining that with Coinbase Clearing's DCO status, Coinbase would be able to run prediction market trades end to end and retain exchange and clearing fees it currently pays to Kalshi. The company agreed in December to acquire The Clearing Company, the startup founded by Toni Gemayel, as part of building that capability.

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

How the move compares with other brokers

Robinhood has pursued a similar vertical path. Its joint-venture exchange with Susquehanna International Group, Rothera, handled 3.4 billion contracts in Q3 and passed $100m in annualised revenue in its first full quarter, the company said. Robinhood booked $173m in prediction market revenue in the quarter, or roughly $690m annualised, about three times Coinbase's reported run rate.

Robinhood's CFO Jason Verma told investors Rothera will be Robinhood's "primary exchange," with Crypto.com/OG.com as its "main second exchange." Verma also said Robinhood had previously routed flow to other exchanges without financial incentives and now holds equity stakes in Crypto.com and OG.com that can grow to 10% with volume. Robinhood plans to continue routing volume across venues rather than consolidating to one venue; 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 after launching Coinbase-listed contracts. Both firms' moves will affect Kalshi: Robinhood accounted for more than half of Kalshi's volume in late 2025, and Coinbase has not disclosed its share of Kalshi's volume.

Product mix, legal friction and short-term economics

Haas said transaction expenses reached 17% of net revenue in Q3, "with growth in prediction markets increasing the contribution from associated exchange fees." If Coinbase lists contracts and clears them internally, those fees would stay on Coinbase's own P&L rather than being paid to a third-party venue.

Daily prediction market traders rose more than 60% from Q2, and Haas noted that "in the third quarter, more than 50% of contracts traded were non-sports." Armstrong said the business continued "growing even through slower months around sports," driven by "crypto contracts, where we have a strong right to win." On 6 October Coinbase added 15-minute and one-hour price contracts on 10 crypto assets.

Prediction markets have faced legal pushback in some US jurisdictions. Federal judges in Michigan and Connecticut denied Coinbase's bids to block state enforcement in August 2026, and Coinbase agreed to pull sports contracts from Michigan while it appeals. On 25 September 2026 the Sixth Circuit rejected Kalshi's claim that sports contracts are swaps under exclusive CFTC jurisdiction. Coinbase also pulled contracts from Nevada after a Carson City judge granted the Nevada Gaming Control Board a preliminary injunction in March 2026. Coinbase and Kalshi maintain the products are federally regulated derivatives; the companies expect the conflict ultimately to be decided by the Supreme Court.

Guidance and near-term spend

Coinbase guided fourth-quarter subscription and services revenue to $550m–$630m and adjusted expenses to $1.007bn–$1.157bn. Transaction revenue through 25 October was about $165m. Haas said fourth-quarter spending would include "discretionary marketing investments in products like prediction markets, where we see strong demand and growth." The company reported adjusted net income of $77.7m for Q3 and said quarterly net income of $719m was driven largely by unrealised gains on crypto assets the firm holds for investment.

A thinly traded Kalshi market had priced about a 36% chance that monthly transacting users would top 7.5 million; it drew roughly $2,300 in volume across all strikes. Coinbase shares closed at $160.59 before the earnings release.