Two prominent U.S. cryptocurrency firms are making strides in the realm of prediction markets, marking a potentially transformative development in digital asset trading. Gemini, a well-known cryptocurrency exchange, is actively seeking regulatory approval from the Commodity Futures Trading Commission (CFTC) to launch event-based derivatives. Meanwhile, Crypto.com has already taken a significant step by partnering with Hollywood.com to introduce contracts centered around entertainment events.
Gemini is gearing up for its foray into the prediction-market space by submitting a proposal to the CFTC that would allow it to operate derivatives contracts based on outcomes of real-world events. If granted approval, this move would position Gemini in direct competition with existing platforms such as Polymarket and Kalshi, which already offer similar products. Analysts interpret this application as a strategic endeavor aimed at diversifying revenue streams amid unstable spot-market trading conditions. By expanding into regulated event-based derivatives, Gemini seeks to establish itself beyond conventional cryptocurrency trading, targeting an emerging market that has captured traders’ attention during times of heightened digital-asset volatility.
In contrast, Crypto.com has adopted a unique approach to enter the prediction market. Its U.S. affiliate, Crypto.com Derivatives North America, which is registered with the CFTC as both an exchange and a clearinghouse, plans to implement contracts related to the entertainment sector—specifically, movie releases, television shows, award ceremonies, and various pop-culture events. This initiative is anticipated to accelerate the transition of crypto prediction products from niche markets to more mainstream trading instruments. However, it also brings forth challenges regarding liquidity, the design of its contracts, and user protection in a space that still operates under limited regulation.
By framing prediction markets as an entertainment-centric product category, Crypto.com aims to attract users who may not typically engage in conventional crypto trading. Unlike Gemini, which is focusing on a broader array of real-world events, Crypto.com is honing in on a specific thematic vertical, potentially setting a precedent for specialized contracts in the future.
The implications of these developments for the cryptocurrency industry and investors are significant. They add layers of regulatory complexity for exchanges, which must ensure compliance, manage counterparty risk, create transparent settlement processes, and secure sufficient liquidity for effective trading. As prediction markets begin to blur the distinctions between traditional derivatives and speculative trading, these platforms may encounter increased scrutiny from regulators. This scrutiny could result in heightened requirements for risk disclosures and adjustments to market-making standards.
For crypto-asset investors, this trend presents both opportunities and challenges. Early adopters may enjoy a first-mover advantage in this burgeoning market, yet the absence of substantial long-term performance data renders it a risky venture. As the CFTC continues to review more proposals for event contracts and established derivatives companies contemplate entering this space, the competitive landscape of crypto prediction markets could evolve rapidly, creating both excitement and caution among stakeholders.
