Crypto Exchanges Enter Prediction Markets as Competition Rises

Two major US crypto firms are moving into prediction markets by launching event-based contracts, signaling a new frontier in digital-asset trading.

Gemini is seeking regulatory approval to operate prediction-market derivatives, while Crypto.com has already partnered with Hollywood.com to launch entertainment-focused contracts.

Gemini’s Regulated Ambition in the Prediction-Market Arena

Gemini is preparing to enter the prediction-market business and has applied to the Commodity Futures Trading Commission (CFTC). The filing seeks approval to operate derivatives contracts based on real-world event outcomes.

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If the CFTC grants approval, Gemini’s exchange license would place the firm in direct competition with platforms that already offer, or are seeking to offer, similar event-based products, including Polymarket and Kalshi.

Analysts view the application as a strategic move to diversify revenue sources at a time when spot-market activity remains uneven. The exchange is attempting to expand beyond traditional crypto trading and position itself in a regulated segment of event-based derivatives, a field that has gained attention as traders look for alternative markets during periods of digital-asset volatility.

Crypto.com has taken a different approach. Its US affiliate, Crypto.com Derivatives North America — a CFTC-registered exchange and clearing house — will provide infrastructure for contracts tied to movie releases, TV shows, award results, and other pop-culture events.

The initiative could speed up the shift from niche crypto prediction products to more mainstream event-trading instruments. However, it also raises concerns over liquidity, contract design, and user protection in a segment that is still lightly regulated.

The company’s strategy seeks to reach users outside traditional crypto trading by positioning prediction markets as an entertainment-driven product category. Unlike Gemini, which targets a broad set of real-world events, Crypto.com is entering the market through a themed vertical that may evolve into a template for future sector-specific contract offerings.

Implications for the Crypto Industry and Investors

These developments add regulatory complexity for exchanges. They must secure compliance, manage counterparty risk, design transparent settlement structures, and secure enough liquidity to support trading activity.

Platforms will likely face closer regulatory scrutiny as prediction markets blur the line between traditional derivatives and speculative trading. They may also be required to strengthen risk disclosures and adjust market-making standards.

The trend creates both opportunity and caution for crypto-asset investors. Early participants may benefit from the first-mover advantage, but the lack of long-term performance data increases risk.

With the CFTC reviewing more event-contract proposals and established derivatives firms considering entry, the competitive landscape for crypto prediction markets could change quickly.