Luno wants more than crypto trading. Prediction markets are the first move.

Luno, the UK-born digital asset firm that allows users to trade tokenised US stocks and exchange-traded funds (ETFs), and buy, sell, and earn yield for holding cryptocurrencies, has launched prediction markets for users in South Africa and Nigeria, two of its four operational markets in Africa.

Launched in partnership with Limitless, a US-based prediction market infrastructure provider, the new feature will allow Luno users to place short-term bets on whether major cryptocurrencies like Bitcoin, Ether, and Solana will finish above or below a target price within 24 hours, with payouts for correct predictions. 

The rollout marks the first step in Luno’s derivatives strategy, advancing the company’s push to become an ‘all-in-one’ investment app for users, following earlier launches of staking and tokenised US equities in both countries. The company plans to add other derivative products, including perpetuals and potentially futures, for Nigerian users later this year.

“Prediction Markets are a natural evolution of how our customers already engage with cryptocurrency, and there is a strong customer demand for this product,” Ayotunde Alabi, Luno Nigeria Country Manager and Chief Executive Officer (CEO), told TechCabal. “Many of our customers closely follow price movements, form views on where markets are headed, and look for structured ways to act on that knowledge.”

The feature sits alongside existing crypto trading, staking, and tokenised equity products on Luno. Prediction markets are a form of derivatives that let users speculate on the outcome of specific events—in this case, short-term crypto price movements—without directly owning the underlying asset. Each market has a fixed settlement window and a pre-defined payoff structure, so users either earn a payout if their prediction is correct or lose their stake if it is wrong.

According to Alabi, customers can participate using USD Coin (USDC), a dollar‑pegged stablecoin, and must first fund a separate USDC predictions wallet to join. The Prediction Markets product is open to KYC‑verified users, with participation starting at 3 USDC and capped at 10,000 USDC per prediction. Customers can cancel their positions before the one-day window closes, but once a market settles, they either lose their stake or claim a payout based on the outcome.

“Prediction Markets provide a mandatory risk disclosure, which customers have to accept before they can participate in and before any funds can be committed,” Alabi said. “A customer is prohibited from holding on both sides of the same market simultaneously, and there is a clearly defined maximum exposure per prediction. These are features of a structured financial tool.”

Luno’s prediction market product operates a peer-to-peer (P2P) model; customers are betting against other users, not against Luno, and the company only earns fees for running the market. 

Each prediction has another user as a counterparty on the other side of the trade, so when a customer loses, their staked USDC goes to that counterparty, not to Luno, said Alabi. 

Luno and its partner Limitless charge buy and sell fees for every trade, and these fees form their take rate for providing the market. Users pay a buy fee when they take a position in a trade, ranging from 0.03% to 3% of the staked amount. They also pay a sell fee, up to 1.5%, when they exit a position or trade.

The launch comes as African regulators, including Ghana, Rwanda, South Africa, Kenya, and Nigeria, step up efforts to regulate the broader digital asset sector. Luno’s classification of its prediction markets and its approach to worst-case loss scenarios will determine how much risk retail traders ultimately face and the intensity of scrutiny from financial and betting regulators. 

Prediction markets are often likened to gaming products because of their inherent risk–reward structure. In 2025, the Lagos State Lotteries and Gaming Authority (LSLGA), the state’s gaming industry regulator, listed Bayse Markets (formerly Gowagr), a Nigerian prediction markets platform, among illegal gaming operators. The classification of such products remains an open question for operators seeking to launch them.

Prediction Markets is also a way for Luno to deepen engagement with active digital asset traders who are already familiar with the technology. Luno says its new product will focus only on crypto price prediction and not encroach on other real-world events typically seen on platforms such as Polymarket and Kalshi.

“Our focus is on crypto-based prediction markets, and we do not have plans to expand the product beyond crypto-related events,” Alabi said. “The product today is built around short-term price predictions on leading cryptocurrencies, being Bitcoin, Ether, Solana, Dogecoin, and XRP.”

Several local competitors have moved into derivatives, including South Africa’s VALR and Nigeria’s Roqqu, which offer futures trading, but no major crypto exchange serving Nigerian and South African users currently offers a dedicated prediction markets product. Luno will also compete for mindshare with local prediction market platforms, such as Bayse Markets and MevsYou, which enable crypto price prediction events.

Luno’s prediction markets product, an early test of its derivatives ambition, is a direct answer to competition from both ends of the market and a litmus for what truly scales in Africa’s digital asset sector beyond buying, selling, and holding cryptocurrencies.