Coinbase has agreed to acquire The Clearing Company, an on-chain prediction markets startup, as the crypto exchange continues to broaden its product scope beyond digital asset trading. The transaction, which is expected to close in January, was announced shortly after Coinbase revealed its entry into prediction markets as part of its broader strategy to become what it calls an “Everything Exchange.” Financial terms of the deal were not disclosed.
Founded earlier this year, The Clearing Company represents a rapid consolidation move in a sector that has drawn increased attention from both crypto-native firms and traditional financial players. The startup raised $15 million in a funding round that included Coinbase Ventures, Union Square Ventures, and Haun Ventures. Its founding team brings experience from prediction market platforms Polymarket and Kalshi, as well as crypto infrastructure firms such as 0x and Dune.
Prediction Markets Move Toward the Financial Mainstream
The acquisition underscores a wider shift in how event-based markets are being positioned within regulated financial frameworks. Prediction markets, which allow users to trade on real-world outcomes across politics, sports, and culture, are increasingly viewed as adjacent to derivatives markets rather than speculative gambling products. Coinbase executives have framed these markets as a natural extension of modern financial infrastructure, particularly when supported by blockchain-based settlement.
Regulatory considerations remain central to this expansion. Last month, The Clearing Company applied to the US Commodity Futures Trading Commission to register as a Derivatives Clearing Organization, a step that could integrate its platform more closely with established market structures. This comes as US regulators continue to clarify how prediction markets should be supervised, following heightened activity during the 2024 US presidential election cycle.
Competitive Landscape and Strategic Implications
Coinbase’s move places it more directly in competition with a small group of established players. Polymarket has emerged as the leading decentralized prediction market platform, while Kalshi operates under US regulatory oversight as a centralized alternative. Traditional betting firms are also testing the space, with DraftKings signaling interest in offering prediction-style contracts, potentially including crypto-linked products.
At the macro level, Coinbase’s strategy reflects a broader effort by large crypto firms to diversify revenue streams amid fluctuating trading volumes. The company has also announced plans to offer stock trading, aligning its platform more closely with multi-asset brokers. At the same time, potential changes to US tax policy affecting gambling losses have raised questions about the relative tax treatment of prediction markets versus sportsbooks, a factor Coinbase has highlighted in recent market commentary.
Taken together, the acquisition of The Clearing Company signals Coinbase’s intent to position itself at the intersection of crypto infrastructure, regulated markets, and emerging financial products. As prediction markets evolve, their integration into established platforms could shape how retail and institutional participants access event-driven risk and information markets.
