Prediction markets are emerging as a surprising new growth lever for Coinbase and Robinhood as investors look past a weak quarter in crypto trading and start focusing on what’s next, Cantor Fitzgerald analyst Ramsey El-Assal says.
El-Assal argues investors increasingly view quarterly results as backward-looking and are shifting attention to forward-looking demand and product roadmaps — with prediction markets among the most-watched new offerings. Both Coinbase and Robinhood are expected to report softer Q1 2026 numbers after a quarter in which Bitcoin (around $77,204.58) and ether fell roughly 23% and 29%, dragging trading volumes down across exchanges. Third‑party data show Coinbase’s monthly volumes slid from about $66 billion in January to $54 billion in March.
Cantor’s estimates put Coinbase’s consumer and institutional trading volumes at roughly $35 billion and $167 billion, respectively — both below Street expectations — and projects exchange revenue will come in under consensus. Still, El-Assal kept an “overweight” rating on Coinbase and raised his price target to $250, citing improving sentiment and longer-term product-driven growth.
Robinhood faces comparable near-term headwinds: lower trading volumes and pressure on net interest revenue from falling rates. Cantor notes, however, that Robinhood’s model can be resilient — higher volatility tends to boost trading margins, and the firm expects stronger yields in equities and options to partly offset weaker activity. Cantor also flagged a potential hit to crypto revenue quality on Robinhood’s tiered pricing structure, which generates lower yields from large active traders but higher yields from marginal traders — the latter group has pulled back in volatile markets. Cantor maintained an “overweight” on Robinhood and raised its price target to $110.
Despite the quarterly softness, both stocks have rallied recently: Coinbase is up about 18% quarter-to-date, while Robinhood has climbed roughly 40% in April from late-March lows, helped by easing geopolitical tensions and risk-on sentiment.
The strategic question now is product execution. Coinbase’s prediction market, launched this year, “continues to attract meaningful interest,” El-Assal said. Robinhood is also pushing into prediction markets alongside initiatives around tokenization and private market access, and potential regulatory changes — such as updates to pattern day trading rules — could further influence growth trajectories.
But prediction markets come with regulatory risk. On Tuesday the New York Attorney General filed suit against Coinbase and Gemini, alleging their prediction-market products are gambling and violate state rules. The legal status of prediction markets — especially sports-related contracts — is contested: the CFTC treats them as swaps under federal oversight, while some states argue sports-related contracts aren’t swaps and should be regulated at the state level. That dispute may ultimately reach the U.S. Supreme Court.
Bottom line: as crypto trading remains tied to price cycles, the next leg of growth for major retail platforms may depend less on spot market volumes and more on new products like prediction markets — a promising but legally complex frontier.
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