Coinbase is preparing to enter a hot new market, Bloomberg has learned. What to do with the stock?

Coinbase, the largest U.S. crypto exchange, is set to announce the launch of prediction markets and tokenized stocks on December 17, Bloomberg has learned. These products are among the hottest in the financial market right now, the agency claims. Coinbase wants to become an "app for everything": expanding traders' access to different types of digital and traditional assets. Investors don't have much confidence in the company yet.

Coinbase plans to announce the launch of prediction markets next week, December 17, Bloomberg reports citing a source. This will allow users to bet on the outcomes of events - from sports matches to elections.

In addition, Coinbase will introduce tokenized shares - digital securities on blockchain, according to Bloomberg. Tokenized shares will be launched internally, without the participation of partners, the agency's source specified.

Coinbase executives have previously talked about their intention to enter these areas, but there have been no official announcements about the launch so far. However, screenshots from applications hinting at the relevant functionality have been circulating on Social Network X for several weeks, Bloomberg notes.

A Coinbase spokesperson declined to comment to Bloomberg on the company's plans, saying only, "Join our Dec. 17 broadcast to find out what new products Coinbase is preparing to launch."

The company's shares were adding about 0.5% in the Dec. 12 premarket, up 8.3% YTD.

These moves are part of the company's strategy to become an "app for everything", giving traders access to a wide range of assets and markets, as well as keeping up with competitors who are also actively expanding the lineup of services (including crypto exchanges Robinhood and Kraken), Bloomberg writes. This is happening against the backdrop of growing trading in tokenized shares: over the past 30 days, the volume of monthly transfers has increased by 32%, reaching $1.45 billion, according to data from the tracker rwa.xyz.

Prediction markets are also experiencing rapid growth in popularity: over the past year, they have attracted the interest of both traditional financial exchanges and crypto platforms, the agency notes. For example, this week the Gemini exchange, founded by billionaire twins Tyler and Cameron Winklevoss, received regulatory approval allowing it to launch relevant products.

On December 10, BofA lowered its target price on Coinbase Global shares from $358 to $341, which implies their growth of almost 27% compared to the last closing price. At the same time, BofA maintained a neutral rating for the securities, suggesting a "hold" advice.

In addition, Goldman Sachs also reiterated a neutral rating in December, while reducing the target from $314 to $294.

Most analysts meanwhile are advising a "buy" on Coinbase stock: it has 20 Buy ratings and two Overweight ratings versus 12 Hold ("hold"), one Underweight ("below market") and two Sell ("sell"), MarketWatch shows. The average target price of $389.08 suggests upside potential of nearly 45% from current levels.

In October, it became known that Trump Media & Technology Group plans to launch Truth Predict, a service that allows users to bet on events, on the Truth Social platform. Bets can be placed on the outcome of political elections, inflation dynamics, commodity prices and sporting events. After testing the platform for prediction contracts, it is planned to fully launch the service in the United States and then enter international markets.

This article was AI-translated and verified by a human editor