Bernstein: Prediction Markets to Drive Robinhood and Coinbase Growth
A Bernstein report highlights the emergence of prediction markets as a mainstream, investable asset class that could boost Robinhood and Coinbase. Robinhood’s prediction market saw $2.3 billion in Q3 trading volume, rising to $2.5 billion in October—implying roughly $300 million in annualized revenue at current levels. Coinbase plans to fold prediction markets into its “Everything Exchange” platform alongside crypto, tokenized stocks, and stablecoins, making it a priority product by year-end. The report notes improved regulatory clarity and broader access driven by platforms like Kalshi and Polymarket, while institutional and retail participation converges. With regulatory easing and growing user demand, prediction markets are poised to become a key revenue stream for leading trading platforms.
Bullish
The Bernstein report underscores prediction markets’ rise as a new revenue channel for major trading platforms. Robinhood’s strong Q3 volumes and Coinbase’s integration plan signal growing market adoption and monetization potential. Historically, the launch of innovative trading products—such as options and tokenized assets—has driven user engagement and fee income for exchanges. Regulatory advances around prediction markets, evidenced by Kalshi’s approval and Polymarket’s compliance efforts, reduce legal uncertainty and attract institutional interest. In the short term, platforms may see increased trading activity and improved investor sentiment. Over the long term, prediction markets could diversify revenue streams, enhance platform stickiness, and support sustained growth in user bases and trading volumes. These factors collectively point to a bullish outlook for both Robinhood and Coinbase.