Brian Armstrong, CEO of Coinbase Global Inc., speaks at the Messari Mainnet Summit in New York on Thursday, September 21, 2023.
Michael Nagle | Bloomberg | Getty Images
coinbase is making its biggest push yet to move beyond crypto into a broader personal investment stack and re-establish itself as a mainstream trading and finance platform as competitors show there is real money in always-on engagement products.
The digital asset exchange on Wednesday announced a major rollout of new products aimed at turning Coinbase into a one-stop financial app, expanding into stocks, more advanced trading, and prediction markets, as well as doubling down on the on-chain ecosystem and new tools for businesses, developers, and automated financial guidance.
Many of these products have been telegraphed for months, but Coinbase says they are now being built and ready for use.
CEO Brian Armstrong wants his platform to be a place where you can trade just about anything.
This includes stocks, streamlined futures and perpetual experiences, prediction markets through Kalsi, and a tokenization roadmap aimed at eventually bringing more traditional assets, including stocks, on-chain.
The field of prediction markets in particular is rapidly becoming crowded.
draft kings is moving to acquire its own exchange, FanDuel is partnering with CME, and Polymarket is entering the U.S. through a newly approved venue. robin hoodMeanwhile, LedgerX is at the center of regulatory efforts.
The defining conflict in this space remains Karsi vs. polymarket, regulated rail vs. crypto-native liquidity.
Mr. Armstrong said the appeal of the category is not just the trades, but the insight into sentiment and what people think will happen next on a particular topic.
“If you look at things like economic indicators and elections, people are using prediction markets to try to figure out what’s going to happen next month,” Armstrong told CNBC. “Probably 1% of people are using it as an asset class for trading, and 99% of people are using it as a way to figure out what’s going to happen. It’s almost like a traditional media, or maybe entertainment competitor.”
During the company’s third-quarter earnings call with analysts in October, Armstrong demonstrated how easily prediction market bets can be manipulated and rattled off some words that had been bet.
“I got a little distracted because I was following the prediction market of what Coinbase would say on its next earnings release,” Armstrong said. “And I would like to add the words Bitcoin, Ethereum, Blockchain, Staking, Web3 here just to make sure you understand before the call ends.”
Robinhood highlighted that shift this week by expanding its predictions market to sports-style contracts similar to parlays and prop bets, touting the category as its fastest-growing business by revenue.
Coinbase is now introducing the same type of outcome trading into its ecosystem, as part of a broader bet that the next generation of securities trading will be a single app that blends traditional assets, derivatives, and on-chain rails.
Coinbase is combining trading expansion with a tokenization roadmap that signals the platform’s next direction by bringing more traditional assets, including stocks, on-chain.
The company is launching Coinbase Tokenize, an institutional stack aimed at supporting the tokenization of real-world assets.
Mr. Armstrong framed this expansion as a bridge to something bigger.
Trading the stock is a “good first step,” he said, but the real goal is to tokenize the stock. He said that Coinbase’s ability to get tokenized stocks live could “democratize access for people around the world” and unlock new market structures in the U.S., such as a more robust and specialized futures market tied to stocks.
“So this is the starting point,” he said.
This announcement also expands on Coinbase’s efforts to become an on-chain liquidity provider, rather than just a venue for listed tokens.
For businesses and developers, Coinbase is expanding the platform’s story beyond retail transactions. The company said Coinbase Business is now available to eligible customers in the US and Singapore and is rolling out an expanded API suite spanning custody, payments, trading, and stablecoins.
Armstrong’s broader argument is that cryptocurrencies are not a niche category, but an upgrade cycle for the financial system itself.
“Cryptocurrencies are updating all financial services,” he said, suggesting that all major asset classes will move on-chain over time, from prediction markets and stocks to commodities and eventually real-world assets such as real estate.
He said even the largest asset managers have expressed a desire to move their funds on-chain, and are positioning Coinbase as a central platform for that transition.
Coinbase is also introducing “custom stablecoins” for businesses that need a branded stablecoin rail, and is spotlighting x402, a payments standard the company aims to make it easier to attach stablecoin payments to web requests, such as automated commerce and agent-initiated transactions.
The key to the strategy is retention and diversification.
Coinbase already has a large crypto-native user base and hopes its customers will remain on the platform across asset classes even as crypto trading volumes decline and trading revenues are compressed.
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