Coinbase Says Prediction Markets Passed $200 Million in Annualised Revenue

Coinbase has told investors that prediction markets are one of the fastest growing products in its history, with annualised revenue above $200 million in the third quarter. It says it is building its own clearing for the product, and its results say nothing about the states pressing it over sports contracts.

• Coinbase said in its third-quarter earnings presentation, published on 29 October, that prediction markets "grew to over $200M in annualized revenue", up from more than $100 million in the second quarter
• The company reported 82% quarterly compound revenue growth since launch and daily prediction traders up more than 60% on the previous quarter, but disclosed no contract volumes, user totals or quarterly revenue figure
• It said it is "building toward USDC-native, in-house clearing and end-to-end infrastructure", while exchange fees tied to prediction markets helped lift transaction expense to 17% of net revenue
• Neither the presentation nor the quarterly report names Kalshi, whose contracts Coinbase offers, or any of the state actions against its prediction markets business
• Coinbase stopped offering sports contracts in Michigan on 10 October and was sent one of Ohio's ten cease-and-desist letters on 2 October

Coinbase Puts Prediction Markets Past $200 Million a Year

Coinbase Global published its results for the quarter to 30 September on 29 October as an earnings presentation, furnished to the Securities and Exchange Commission (SEC) with a Form 8-K. The presentation describes prediction markets as "one of our fastest growing products by revenue in history", a ranking it measures by how quickly a product reached $200 million in quarterly annualised net revenue. Its second-quarter presentation in July had put the figure at more than $100 million and said prediction market contracts and revenue had more than doubled quarter on quarter.

On that definition the figure implies at least $50 million of revenue in the quarter; Coinbase does not give the exact number. A chart covering the first three quarters of 2026 is labelled "82% Quarterly Compound Growth". Coinbase says daily traders, measured as users who executed a prediction market trade, rose more than 60% on the second quarter, and that users who trade predictions "are driving incremental spot volume".

The mix has shifted, according to the company. In July it said sports continued to lead, followed by crypto, helped by the NBA playoffs and World Cup football. This quarter it points to "non-sports categories showing strong growth through seasonally slower sports months" and to recurring contracts such as crypto volatility markets. Its next steps are event hubs, with the midterm elections given as an example, integration with its Coinbase One subscription, and a new product for more active traders.

Coinbase rolled prediction markets out to US customers in January, built in partnership with Kalshi, CoinDesk reported at the time. The quarterly report on Form 10-Q attributes a rise in an "other" expense line "largely" to "exchange fees associated with our prediction markets offering", and the presentation says those fees took transaction expense to 17% of net revenue, up 32 basis points on the quarter. The plan to improve the product's economics is to build towards "USDC-native, in-house clearing". It does not say when, or whether that means its own exchange.

Prediction Markets Cushioned a Weak Crypto Quarter

Total revenue was $1.2 billion, flat on the second quarter. Transaction revenue fell 44% year on year to $590.2 million, according to the 10-Q, which says lower consumer spot volume was offset in part by "the launch of prediction markets trading". Consumer transaction revenue was about $450 million, with declines in crypto trading volumes "cushioned by continued growth in prediction markets", the presentation says. Coinbase reported net income of $719 million.

Coinbase Is Paying Rent on Its Fastest Growing Product

Coinbase is a broker in this market, and the fees it pays the exchange rise with its own success. The in-house clearing plan is meant to solve that, and Robinhood has already moved: Robinhood co-owns its primary venue, Rothera, and plans to route most of its flow there and to OG.com, in which it holds a stake. Robinhood reported $173 million of event contract revenue in the same quarter, so Coinbase's floor of $50 million leaves it well behind. Kalshi, meanwhile, raised $1 billion at a $40 billion valuation on the day Coinbase reported, a sign of where investors think the value sits. Until Coinbase clears its own contracts, part of its growth goes to the venue.

The Results Are Silent on the States

The presentation's only regulatory reference to prediction markets is a forward-looking statement risk about "the growth and regulatory treatment" of its derivatives and prediction markets offerings. The 10-Q's legal proceedings note does not mention Michigan, Ohio or the New York Attorney General's suit filed in April. Michigan's restrictions took effect after the quarter closed, on 10 October, and Ohio's letter is dated 2 October, so neither touches these numbers. The size of Coinbase's Michigan sports business has never been disclosed, and the fourth quarter will be the first to carry its loss.

Non-Sports Growth Is Also the Safer Growth

Michigan's stipulation and Ohio's letters target sports contracts, where state gambling law bites hardest. Coinbase's emphasis on crypto volatility contracts and election hubs therefore serves a regulatory purpose as well as a commercial one. Election markets carry their own exposure, however: Taiwan blocked Coinbase's website in October under a court order citing its election law, although the authorities have not linked the block to any product.

Coinbase has shown that prediction markets can move its revenue line within three quarters. Whether it keeps more of that revenue depends on clearing it does not yet have and on courts it does not control.