Coinbase Expands Beyond Crypto with Major New Product Lines

Coinbase US19260Q1076

The US-based cryptocurrency exchange Coinbase is accelerating its strategic evolution with plans to unveil two significant new business areas. In a move to transform from a pure-play crypto platform into a comprehensive hub for digital assets, the company is preparing to launch prediction markets and tokenized equities.

This product diversification directly supports the long-term strategy articulated by CEO Brian Armstrong. His vision is to develop Coinbase into an "Everything Exchange," a single platform where investors can access a wide range of asset classes including cryptocurrencies, tokenized stocks, and event-based contracts. As far back as May 2025, Armstrong outlined to investors an ambition to position Coinbase among the world's leading financial applications within a decade.

Recent corporate milestones underscore this expansion. The company's Q3 2025 shareholder letter highlighted several key developments:
* Integration with decentralized exchanges (DEX) dramatically widened its spot trading offerings from approximately 300 to over 40,000 assets.
* The US business expanded with the introduction of perpetual futures trading.
* A global options platform was established through the acquisition of Deribit.
* Custody services for institutional clients were significantly strengthened.

Prediction Markets Powered by Kalshi

The first major new initiative involves a deep technical partnership with Kalshi, a US-based prediction market provider. According to separate reports from Bloomberg (December 11) and CNBC (December 12), Coinbase intends to formally announce its own prediction market platform at a "Coinbase System Update" event scheduled for December 17. The platform will be built on Kalshi's underlying technology.

Early indications of this venture emerged publicly on November 18, when tech analyst Jane Manchun Wong shared a screenshot of a related Coinbase dashboard on social media. Shortly after, the platform The Information was the first to report on the partnership with Kalshi.

Prediction markets allow users to speculate on the outcome of real-world events, such as elections or sports competitions. This sector has gained considerable momentum over the past year as multiple providers compete for share in this emerging market.

A Proprietary Tokenized Stocks Venture

Running in parallel is a second, internally-developed product line: proprietary tokenized stocks. Bloomberg reported that the company will use the December event to announce its own tokenized equity products, distinguishing its approach from competitors that rely on external partners for similar offerings.

This move would align Coinbase with other platforms like Robinhood, Gemini, and Kraken, which have offered tokenized stock products to non-US customers for roughly a year. For investors, this development promises the future ability to trade digital representations of traditional equities alongside cryptocurrency tokens on the same unified platform.

Financial Performance and Market Pressures

Coinbase reported solid financial results for the third quarter of 2025. Revenue reached $1.9 billion, with net income of $433 million and adjusted EBITDA of $801 million. The platform custodied $516 billion in client assets at the quarter's end. Recurring revenue from subscriptions and services rose 14% to $747 million, driven by higher USDC balances and growing institutional financing activity. Headcount stood at 4,795 full-time employees, a 12% increase from the prior quarter.

However, the company is navigating a challenging and competitive landscape. Robinhood has already integrated Kalshi via a non-exclusive cooperation. Gemini recently received regulatory approval to operate its own prediction markets, while Crypto.com, in partnership with Trump Media & Technology Group, is planning similar products.

The broader crypto market environment remains demanding. In early December, Bitcoin briefly fell to approximately $85,000, its lowest level since March 2025. At the time of the CNBC report, Bitcoin was trading around $89,951, representing a 23% decline over three months. Coinbase's stock has not been immune to this pressure, losing over 16% in the same three-month period. As of a recent Friday close, the share price was €227.90, marking a 13% drop over the prior 30 days and leaving it well below its 52-week high.

Analyst Sentiment Remains Favorable

Despite recent volatility, Wall Street's overall outlook on Coinbase shares remains positive. Consensus data, based on analysis from 24 to 30 research firms, rates the stock as a "Moderate Buy." The average price target sits between approximately $394 and $397, suggesting significant upside potential from recent trading levels. Analysts frequently cite the growing contribution of service and subscription revenue—a stabilizing factor in the volatile crypto sector—as a key reason for this optimism.

December 17: A Pivotal Announcement

All attention now turns to the December 17 "Coinbase System Update" event. The company is expected to provide official details on the launch timeline for its prediction markets, the geographic rollout plan for tokenized stocks, the technical depth of the Kalshi integration, and the fee structure for the new products.

For Q4 2025, Coinbase anticipates subscription and services revenue between $710 million and $790 million. The company estimated transaction revenue for October at approximately $385 million. Against this backdrop, the expansion into prediction markets and tokenized equities represents the most substantial product diversification since its initial public offering. The clear strategic objective is to meaningfully reduce reliance on pure cryptocurrency spot trading revenue during periods of heightened market volatility.