Coinbase Bets Big on Prediction Markets, Acquiring The Clearing Company to Scale Onchain Event Trading
Key Takeaways:Coinbase Accelerates Its Prediction Markets StrategyWhat The Clearing Company Brings to CoinbaseDeep Expertise in Regulated, Onchain MarketsPrediction Markets as a Growth Engine for Crypto Platforms
Due to any significant political and economic events that occurred in the previous two years, prediction markets received a new wave of attention. Every high profile election year the volumes have been astronomical and the amount of interest has been on the increase as the traders are looking at products that are related to real-life events and not necessarily speculative.
In the case of crypto exchanges, prediction markets have a number of benefits:
- Higher engagement: Traders check positions frequently as probabilities shift.
- Broader appeal: Events resonate with users who may not actively trade tokens.
- Diversification: Revenue becomes less dependent on crypto market cycles.
The relocation of Coinbase is a trend in the industry. Exchanges are scrambling to become multi-asset exchanges, bringing crypto and derivatives and equities and new instruments together. The threat of competitors to the brokerages and other exchanges has been increasing, compelling the companies to move out of their initial market niche.
Prediction markets are also an appropriate addition to the vision of the Everything Exchange that Coinbase has. The integration of assets classes will allow Coinbase to retain users on its platform irrespective of the market environment. Event driven market can still produce activity when the crypto volatility disappears.
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