Coinbase stock falls 3% to $145.41 after a Michigan judge rejects its sports contract injunction, keeping regulatory pressure on COIN and prediction markets.
Coinbase shares fell 3% to $145.41 after a Michigan federal judge rejected the cryptocurrency exchange’s request to temporarily block state enforcement of gambling laws tied to sports event contracts. The decision allows Michigan regulators to continue pursuing action while Coinbase’s broader lawsuit moves through the courts.
The dispute centers on whether sports event contracts offered through prediction-market platform Kalshi should be treated as federally regulated financial products or as gambling instruments subject to state oversight. Coinbase has argued that the Commodity Exchange Act gives federal regulators authority over these contracts, limiting Michigan’s ability to intervene.
The ruling creates another legal obstacle for Coinbase as it seeks to expand its presence in prediction markets. The case could also have implications beyond Michigan if courts and regulators continue to debate where prediction contracts fit within the U.S. financial and gambling frameworks.
Michigan Court Rejects Coinbase Request
Coinbase filed its lawsuit against Michigan in December 2025, arguing that sports event contracts should fall under the jurisdiction of the Commodity Futures Trading Commission rather than state gambling authorities. The company sought a preliminary injunction that would have prevented Michigan from enforcing its gambling restrictions while the dispute was being litigated.
U.S. District Judge Shalina Kumar denied that request, concluding that Coinbase had not demonstrated a strong likelihood of winning its case. The court also rejected Coinbase’s argument that complying with both federal requirements and Michigan law would be legally impossible.
The decision does not resolve the underlying lawsuit. Instead, it allows Michigan’s enforcement efforts to continue as the broader legal arguments are examined.
- Coinbase shares closed at $145.41.
- COIN fell 3% during Thursday’s session.
- The stock traded as high as $150.61.
Prediction Markets Face Regulatory Test
The Coinbase dispute highlights a broader regulatory question surrounding prediction markets. Platforms offering contracts linked to sports, elections and other events have increasingly attracted attention as regulators and state authorities debate whether these products are financial derivatives or forms of wagering.
Coinbase maintains that the contracts available through Kalshi belong within the federal commodities framework. Michigan takes the opposite position, arguing that state gambling rules apply.
The outcome could influence how prediction-market products are offered across state lines. A ruling favoring Coinbase could strengthen arguments for federal oversight, while continued state enforcement could create additional compliance challenges for companies entering the sector.
For Coinbase, the immediate impact is limited to Michigan, but the case adds to the regulatory uncertainty surrounding its expansion into new financial products.
COIN Stock Tests Key Support Levels
The court decision comes as investors closely monitor Coinbase’s technical outlook. COIN closed near $145, only modestly above its 52-week low of $139.11 and significantly below its 52-week peak of $402.16.
Market analyst Chad, posting on X, highlighted the possibility of a triple-bottom formation around the $140 area. The analyst also pointed to bullish divergence in the Relative Strength Index, which can indicate that selling momentum is weakening even when prices remain under pressure.
According to the analysis, $180 represents an important resistance level. A sustained move above $210 could provide stronger confirmation of a potential trend reversal. The analyst also indicated continued dollar-cost averaging despite the stock’s recent decline.
With a market capitalization of about $38.36 billion, Coinbase remains highly sensitive to regulatory developments. Investors will now be watching the Michigan litigation alongside key technical levels as the company continues to pursue opportunities in prediction markets.