Giants Shift Together: Why Are Coinbase and Google Doubling Down on the New Prediction Market Track?

Original | Odaily Planet Daily Wenser

At 6 AM this morning, tech blogger @wongmjane revealed that Coinbase is partnering with Kalshi to develop a prediction market; Google recently announced it will integrate Polymarket and Kalshi's prediction data into Google Finance, allowing users to track "collective intelligence" on event outcomes in real-time. In an instant, both Web2 and Web3 giants are heavily investing in the prediction market space. What trend signals lie behind this? Why are these giants making moves? Will prediction markets become standard features for future products? This article from Odaily Planet Daily will help you understand.

When Giants Focus on Prediction Markets: New Tracks, New Opportunities, New Cakes

The news of Coinbase collaborating with Kalshi to develop a prediction market was initially disclosed by tech blogger @wongmjane. In the accompanying image of the post, we can clearly see that the prediction market page launched by Coinbase is similar to the Polymarket interface, also divided into different sections such as "Trends," "Latest," and "Crypto," where users can buy and sell corresponding chips. Moreover, this prediction market page has thoughtfully prepared a series of "Q&A" to help users quickly familiarize themselves with the platform's features and start trading.

In the lower right corner of the screenshot, we can clearly see that this prediction market is developed by Coinbase in collaboration with Kalshi.

It is worth mentioning that the blogger who disclosed this information is a former Meta employee who gained some attention for discovering unreleased features of social media platforms through reverse engineering.

In addition to Coinbase, earlier this month, Google Finance announced plans to integrate Kalshi and Polymarket, which has already attracted close attention from the crypto market regarding prediction markets. The giants investing in this field are not limited to these two.

In October this year, at the Token2049 event in Singapore, Robinhood CEO Vlad Tenev stated to the media that prediction markets are a significant innovation, sharing similarities with traditional lottery activities, active trading, and traditional media news products, but it is not one of the three; rather, it is a hybrid of all three. Conversely, prediction markets have enormous potential to transform these three massive industries. Additionally, Robinhood launched its prediction market business line before last year's presidential election, which is now one of its fastest-growing segments and one of its nine business lines generating over $100 million in annual revenue. Robinhood's long-term vision is to create a super financial application, becoming a home for users' assets.

Everything stems from the fact that prediction markets are one of the few "market increments" available today.

Earlier this month, data analyst dash posted that October was the most active month for prediction markets in history, with:

• A total of 524,200 users, of which 40.4% were new users.
• 30 million transactions.
• A nominal trading volume of $8.7 billion.
• Odaily Planet Daily notes: Other data shows that Kalshi's trading volume in October reached $4.4 billion; Polymarket's trading volume in October was $3 billion, with the latter's active monthly user count exceeding 477,000, setting a new record.

Furthermore, Kalshi leads in both trading volume and transaction count, with a market share of 45% to 55% (excluding user count); Polymarket follows closely, while other smaller projects account for only about 7% to 10%.

Considering that Kalshi, as the largest domestic prediction market in the U.S., profits through trading fees, a fee ratio of 1% to 2% already indicates that this is a market with annual revenues of at least several billion dollars, and its trading scale is still rapidly growing. This is also why Polymarket and Kalshi have attracted significant capital interest.

Recently, Polymarket received a $2 billion investment from the parent company of the New York Stock Exchange, Intercontinental Exchange, with a valuation of approximately $9 billion; while Kalshi raised $300 million from supporters like Sequoia Capital and A16z at a valuation of $5 billion. Additionally, an October report stated that Kalshi is receiving venture capital proposals with a potential valuation of up to $12 billion, doubling its valuation in less than two weeks.

It must be said that when it comes to betting on the future, capital institutions are never stingy with their funds.

Future Directions of Prediction Markets: Standard Features for Internet Products vs. A Battleground for Giant Liquidity

Currently, the primary goal of giants betting on prediction markets is to compete for "funding liquidity."

Prediction markets, which combine news events, financial trading, and betting functions, can not only serve as online platforms for users to profit from betting transactions but also play the role of an "event prediction machine" to some extent. This was evident during the last U.S. presidential election when Trump won.

In terms of "anything can be bet on," the capacity for "betting events" that prediction markets represented by Polymarket and Kalshi can accommodate far exceeds that of traditional lottery and gambling platforms. To some extent, the emergence of prediction markets is a disruptive innovation to past betting platforms.

As internet products have developed to a certain extent, AI and blockchain have become the undisputed "incremental markets" in the eyes of internet giants. As AI penetration gradually increases, aside from stablecoins, Payfi, ETFs, and other avenues, another new path for widespread adoption of blockchain technology is prediction markets.

After all, as we previously mentioned in “Odaily Interview with 'Polymarket Chinese Region Pioneer': A 225-fold Return Journey in 25 Days”: prediction markets are the shortest path to monetizing cognition.

Taking the latest "Solomon fundraising amount betting event" as an example, due to Solomon Labs raising $100 million in the final moments of its public offering on MetaDao, it became the second-highest fundraising project for MetaDao, second only to UmbraPrivacy. As a result, users betting on various ranges of Solomon's fundraising amounts of $20 million, $40 million to $100 million on Polymarket were all "killed." Meanwhile, the suspected insider address "KimballDavies" chose the low-probability "yes" for this event, collectively profiting over $500,000.

The previous bet on "CZ receiving a pardon from Trump" is also a significant proof of monetizing cognition. Although there may be insider information, the fact is that some people profited by betting on the correct outcome.

This is also one of the examples where "collective intelligence" can be reflected after betting with real money.

In the near future, due to considerations such as user attention competition, prediction markets may become standard features for many internet information platforms, just like AI assistants and voice interaction functions. After all, if you do not keep up with the integration of prediction markets while your competitors do, users will naturally vote with their feet, and traffic and other data will inevitably be affected.

For ordinary users, perhaps diving in and adapting early is the better solution.