Significant Expectations for Coinbase? Some Anticipate Letdown Following Monad

Key Takeaways:

• Coinbase has hinted at a significant announcement set for Dec. 17, with minimal details revealed thus far.
• Market speculation suggests a potential move into prediction markets, possibly in collaboration with Kalshi.
• Coinbase’s ability to engage directly with US users may provide it with a competitive advantage in a sector that has faced liquidity challenges.
• Recent criticism surrounding the Monad token launch has led to increased skepticism within parts of the community.
• While Polymarket currently dominates the prediction markets sector, a Coinbase entry could alter the competitive landscape.

The anticipated Coinbase announcement on Dec. 17 has generated more inquiries than clarifications. The company has disclosed very little information at this point. Coinbase has updated its avatar on X (formerly Twitter), which typically indicates a forthcoming significant development. Speculation is now leaning towards prediction markets.

Coinbase ranks among the largest centralized exchanges by trading volume, trailing only Binance. It also possesses a crucial advantage: the ability to operate directly with US users. This remains a challenge for many platforms due to regulatory constraints. In this regard, Coinbase enjoys greater flexibility than most of its rivals.

This situation places Coinbase in direct competition with Binance. Should it introduce its own prediction markets platform, it could also rival Polymarket.

Prediction markets have historically faced liquidity issues. Trading volumes are often limited, particularly outside of major events. Many believe that providing access to US users could transform this dynamic. A larger user base typically leads to more robust markets.

Coinbase also manages its own Layer 2 network, Base, which supports much of its infrastructure. In 2024, Base was recognized as one of the most profitable L2s. However, it has recently been surpassed by Binance’s opBNB across various metrics. This rivalry between the two exchanges is evident even in this context. Base currently holds the second position, still ahead of Arbitrum (ARB).

With this announcement, Coinbase seems to be pursuing ambitions beyond merely functioning as an exchange. The key question is whether it can successfully achieve this goal.

Source: TokenTerminal

l‘It Will Benefit Crypto Users Least’

At first glance, the situation appears advantageous for Coinbase. The platform benefits from access to US users, and expectations of a more crypto-friendly regulatory environment under Donald Trump further contribute to this outlook. Some anticipate changes at the Federal Reserve that could provide additional support for risk assets.

However, recent developments have complicated the scenario.

The Monad (MON) token launch serves as a notable example. Coinbase was the sole platform to host the ICO, presenting a rare opportunity for US users to participate. Anticipations were high, but the results disappointed many. Approximately 50% of the token supply was allocated to insiders. Following the launch, MON plummeted nearly 60% from its peak value, with trading commencing below the pre-sale price.

This experience appears to have influenced how segments of the community now perceive Coinbase’s forthcoming system update. One user referenced a Coinbase report on altseason released in August, noting that many tokens listed on Coinbase Markets subsequently lost a significant portion of their value:

Whatever this ‘system update’ is, one thing is certain: it will benefit crypto users least, and of them, Base users nothing at all. We know this for a fact because Coinbase Markets did everything they could to not support base coins last year. Now 99% of those coins are close to literally zero.

Is Coinbase Launching Prediction Markets?

Speculation regarding Coinbase’s potential entry into prediction markets has been gaining traction since November. Screenshots of a possible interface began to circulate on X, coinciding with discussions of a partnership with Kalshi.

Source: X

These reports were later corroborated by The Information, which cited sources familiar with the situation. In December, Bloomberg and CNBC also reported that Coinbase is collaborating with Kalshi, again referencing unnamed sources.

Prediction markets have emerged as one of the most talked-about topics in the crypto space. Polymarket currently leads this sector, with interest in the platform increasing, partly due to expectations surrounding a potential airdrop.

Polymarket does have a significant limitation: it is not accessible to US users. While access is planned and a waitlist exists, the restriction remains in place.

If Coinbase proceeds with its own prediction markets offering, it could challenge Polymarket’s current standing. Notably, Coinbase seems to have selected Kalshi, one of Polymarket’s primary competitors, as its partner.

Nevertheless, early leaders in a niche are often dismissed too quickly. Similar arguments arise whenever new meme coin launchpads are introduced. Trading volumes may shift temporarily, but Pump.Fun has consistently reclaimed its leading position. A comparable scenario could unfold here. The Monad incident serves as a reminder that Coinbase’s efforts to expand beyond exchange services have not always been seamless.

The post Big Plans Ahead for Coinbase? Some Expect Disappointment After Monad appeared first on Cryptonews.