Coinbase Makes Power Move: Acquires The Clearing Company to Dominate Prediction Markets
Coinbase just placed a massive bet on the future—and it's not on any single crypto asset. The exchange giant is acquiring The Clearing Company, a strategic grab that positions it squarely at the center of the burgeoning prediction markets arena.
Why Prediction Markets Matter
Forget simple price speculation. Prediction markets let users wager on real-world outcomes—elections, sports, even corporate earnings. It's a multi-billion dollar frontier that blends finance, gaming, and data. By securing a key clearing infrastructure player, Coinbase isn't just dipping a toe in; it's building the plumbing for the entire sector.
A Regulatory Chess Move
This acquisition is a classic power play. Control the clearinghouse, and you influence the market's speed, cost, and—critically—its compliance framework. In a space regulators eye with deep suspicion, owning the backbone offers a strategic shield. It’s a move that would make any traditional finance CEO blush—or maybe just check their own antitrust exposure.
The Bigger Picture: Beyond Trading
Coinbase has been methodically expanding from a simple trading app into a full-spectrum crypto conglomerate. This deal signals its next evolution: becoming the indispensable utility for all things decentralized finance. Prediction markets are a gateway to mainstream adoption, offering tangible use cases that even crypto-skeptics can understand.
One cynical finance jab? Wall Street has spent decades over-complicating derivatives to justify its fees. Crypto might just democratize betting on the apocalypse—and make it more efficient.
The final word? This isn't an expansion. It's an encroachment. Coinbase is no longer just playing the game; it's buying the stadium, rewriting the rules, and keeping the concession revenue. The race to define the future of markets just accelerated.
The deal, announced December 22, comes just five days after Coinbase launched prediction markets on its platform through a partnership with Kalshi.
The acquisition brings specialized talent to Coinbase as the company expands beyond cryptocurrency trading into stocks, prediction markets, and other financial products. Financial terms were not disclosed, but Coinbase described the deal as “immaterial” and expects it to close in January 2026.
Building the Prediction Markets Team
The Clearing Company was founded earlier this year by Toni Gemayel, who previously served as Head of Growth at both Polymarket and Kalshi—two of the biggest names in prediction markets. The startup raised $15 million in August 2025 from investors including Union Square Ventures, Haun Ventures, and notably, Coinbase Ventures.
Nearly all of The Clearing Company’s approximately 10 employees will join Coinbase. The team includes veterans from Polymarket, Kalshi, and other crypto companies. Sam Schwartz, the former Chief Compliance Officer at Kalshi, leads the regulatory and compliance strategy for The Clearing Company.
Source: @coinbase
“Prediction markets work best when strong market structure meets real distribution,” Gemayel said in a statement. The acquisition gives his team access to Coinbase’s massive user base while Coinbase gains expertise in building and scaling prediction markets.
What Are Prediction Markets?
Prediction markets let people trade on the outcomes of real-world events. Users buy contracts that pay $1 if an event happens and $0 if it doesn’t. Contract prices reflect what the market thinks will happen—a contract trading at $0.65 suggests a 65% chance the event occurs.
These markets cover everything from election results and Federal Reserve decisions to sports games and cryptocurrency prices. They’ve gained attention for sometimes predicting outcomes more accurately than traditional polls, as people put real money behind their predictions.
Coinbase launched prediction markets on December 17, 2025, sourcing contracts from Kalshi. Users can trade these contracts in the same app where they buy crypto, stocks, and other assets. The minimum trade is just $1, making it accessible to most users.
The Everything Exchange Strategy
Prediction markets are part of Coinbase’s ambitious plan to offer multiple asset classes on one platform. At a December 17 event called “System Update,” the company unveiled several major products:
Stock Trading: Hundreds of top US stocks and ETFs with zero-commission trading, available 24 hours a day, five days a week. Coinbase plans to add thousands more stocks in coming months.
Tokenization: A new platform called Coinbase Tokenize will help institutions create digital versions of traditional assets like stocks.
Business Tools: Coinbase Business provides startups and small companies with APIs for payments, custody, trading, and stablecoins.
Max Branzburg, Coinbase’s Vice President of Product, explained the vision: “The Everything Exchange is a unified platform to trade crypto, equities, and everything else people want to trade. Prediction markets are an important part of that platform.”
This strategy puts Coinbase in direct competition with platforms like Robinhood, which has also launched prediction markets and stock trading alongside crypto.
A Crowded and Growing Market
The prediction markets space has exploded in 2025. Weekly trading volume across all platforms reached $4 billion in December, with three main competitors dominating the space.
Polymarket, built on the Polygon blockchain, processed over $18 billion in trading volume this year and grew from 20,000 to nearly 58,000 daily active users. The company is seeking new funding at a valuation between $12 billion and $15 billion. In October, Intercontinental Exchange (which owns the New York Stock Exchange) invested up to $2 billion in Polymarket.
Kalshi operates as a regulated, centralized platform and reached an $11 billion valuation in December 2025. The company partners with both Coinbase and Robinhood to provide prediction market contracts.
Robinhood reported 11 billion event contracts traded by more than 1 million customers since launching at the end of 2024, making it the company’s fastest-growing product line by revenue. The company plans international expansion for its prediction markets product.
Traditional sports betting companies are also entering the space. DraftKings has announced plans to offer prediction markets with crypto-linked contracts.
Regulatory Challenges Ahead
The Clearing Company filed an application with the Commodity Futures Trading Commission in November 2025 to become a Derivatives Clearing Organization. If approved, it WOULD operate the first stablecoin-native clearinghouse built specifically for prediction markets.
However, the industry faces regulatory uncertainty. While the CFTC oversees prediction markets as derivatives at the federal level, several states have filed lawsuits. Massachusetts and Nevada are among nine states challenging whether these platforms operate as illegal sports betting rather than regulated financial markets.
Kalshi lost a court battle in Nevada on December 16, 2025, when a federal judge rejected its request to block state regulators from enforcing cease-and-desist orders.
Despite these challenges, Coinbase believes regulatory clarity is improving. The company noted that prediction markets represent “a natural extension of modern financial infrastructure” as more activity moves onto blockchain networks.
The Path Forward
Coinbase completed nine acquisitions in 2025, including the $2.9 billion purchase of derivatives exchange Deribit. The Clearing Company marks the tenth acquisition announcement for the year.
The company sees prediction markets as a way to diversify revenue beyond cryptocurrency trading, which remains cyclical and dependent on crypto prices. Bitcoin has fallen about 30% from its October highs, putting pressure on Coinbase’s traditional business.
By offering stocks, prediction markets, derivatives, and crypto in one platform, Coinbase aims to keep users engaged even when crypto markets are slow. The company’s stock rose following the product announcements on December 17, though it has given back gains from earlier in the year as bitcoin fell about 30% from October highs.
Whether this “Everything Exchange” strategy succeeds will depend on execution. Coinbase must integrate The Clearing Company smoothly, navigate state-level regulations, and compete with established players—all while maintaining the compliance standards that have defined its brand.
The Big Bet on Financial Evolution
Coinbase is betting that the future of finance happens on blockchain networks, with prediction markets playing a key role. By acquiring specialized talent through The Clearing Company and partnering with Kalshi for immediate access, the company is moving fast to claim its position in this emerging market. The January 2026 deal closure will mark another step in transforming Coinbase from a crypto exchange into a comprehensive financial platform.
