Bernstein Forecasts Upside for Coinbase, Robinhood Prediction Market Revenue

As the company itself has said, prediction markets represent Robinhood Markets’ (NASDAQ: HOOD) fastest-growing business on record and that’s prompting some bullish sell-side commentary.

In a report out Monday, Bernstein analyst Gautam Chhugani reiterated the view that Robinhood’s prediction market revenue will hit $1.7 billion in 2028, slightly eclipsing the $1.6 billion the analyst expects the company will generate from cryptocurrency trading.

In boosting top-line estimates for Robinhood by 3% for 2026, 4% for 2027 and 3% for 2028, Chhugani estimates that event contracts will drive $650 million in revenue for the brokerage house this year, implying that figure is poised to more than double by 2028.

California-based Robinhood delivers third-quarter results after the close of U.S. markets on Tuesday, Oct. 27 and there could be more clarity on the prediction market growth front. In the second quarter, Robinhood’s prediction market revenue topped its cryptocurrency business on a quarterly basis for the first time.

Coinbase Commanding PM Growth, Too

On a market share basis, the U.S. prediction market industry is largely dominated by just two companies, but brokerage houses such as Robinhood and Coinbase Global (NASDAQ: COIN) are making inroads in the space.

Coinbase, the largest US-based cryptocurrency trading firm, is seeing prediction market growth. Chhugani forecasts $2 billion of event contracts and derivatives products revenue for Coinbase in 2028, or more than triple the $600 million expected this year. Derivative products likely include perpetual futures, or “perps.”

Coinbase, which offers event contracts through a partnership with one of the largest prediction market operators, may be one of the industry upstarts ideally positioned to capitalize on growth due to its enviable financial position and because of its deep ties to cryptocurrency. Digital currency event contracts are one of the fastest-growing non-sports segments in the prediction market industry today.

Why Prediction Market Growth Matters to Brokers

Next-generation brokerage firms, including Coinbase and Robinhood, are recognizing top-line benefits from event contracts, but their aims aren’t to become pure-play betting companies.

While prediction market platforms generate revenue and trading fees on a standalone basis, the value for financial services companies is in customer acquisition. A Robinhood executive recently noted that many traders whose initial interaction with the company is through yes/no derivatives stick around and engage in options and futures trading. Some even open retirement accounts.

That is to say, prediction markets, when properly executed upon, are “funnels” for financial services firms that have the potential to create “sticky” long-term clients.