Coinbase is taking its biggest step yet into the broader financial sector. On Wednesday, the company announced customers will now be able to trade stocks on its platform, and also place bets on a wide range of events through a partnership with prediction market startup Kalshi. The moves signal that Coinbase is moving beyond its longtime roots as a cryptocurrency company, and are likely to intensify its rivalry with fintech firms like Robinhood.
The stock trading and prediction markets announcements came at a San Francisco event titled System Upgrade that featured stage presentations by Coinbase CEO Brian Armstrong and other executives, who also announced new trading features and a platform called Coinbase Business aimed at startups and small businesses. The event comes as the company is seeking to brand itself as an “everything exchange.”
Notably, the company did not announce a release date for its own cryptocurrency token, which executives have teased in recent months, but without providing additional details beyond saying they want to ensure any token launch takes place in a fair manner.
The new stock trading feature is the most significant announcement by far as it will be a crucial test of whether Coinbase can leverage its dominant crypto brand to expand into other sectors. It will also allow it to compete more directly with Robinhood, which made its name as a stock-trading app, but has since made significant inroads into crypto.
Coinbase will initially offer only a curated list of major stocks and ETFs, but says it will expand this to thousands of other stocks in coming months. The company says stock trading will be available 24 hours a day on five days of the week, and that there will be no fee to trade. Early next year, Coinbase plans to roll out perpetual futures for stocks—a type of derivative pioneered by the crypto industry that lets traders hold options that do not expire. The perpetual futures offering will only be available outside the U.S.
Coinbase’s new stock offerings come at a time when the financial market is beginning to embrace tokenization. The term describes turning a variety of assets into tokens that can be traded on a blockchain, a process that results in near-instant settlement and allows traders to more efficiently deploy collateral. Currently, firms like BlackRock are offering tokenized versions of Treasury Bill and money market funds. Tokenized stock offerings are still at a preliminary stage, but are expected to gain traction rapidly, which could play to Coinbase’s strengths given the firm’s longtime crypto expertise.
For its prediction markets offering, Coinbase will source its order flow from Kalshi, which is the same model used by Robinhood. In practical terms, this entails acting as a distribution platform for the startup, which has grown exponentially this year by offering a new form of betting that invites users to wager against each other on the outcome of events ranging from elections to interest rate cuts to sports games. The Kalshi partnership will likely entail a revenue split of the small fee the platform collects on the wagers.
Stocks and prediction markets have the potential to offer Coinbase significant new revenue streams, and further the company’s long-stated goal of diversifying its business beyond crypto trading. Coinbase’s stock is roughly flat from the start off the year, having giving up big gains in recent months as crypto markets have sagged and the price of Bitcoin has fallen around 30% from its October highs.
Coinbase also used the San Francisco event to announce that its Base App is now available in 140 countries. The app, which debuted this summer, aims to let ordinary people launch financial and creative products on the company’s blockchain and earn a share of the revenue they create.
Other services unveiled by Coinbase on Wednesday included expanded access to the Solana blockchain via a decentralized exchange, and an AI-powered wealth management tool called Coinbase Advisor.
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