Trading hubs Robinhood (HOOD) and Coinbase (COIN) could emerge as the biggest public market beneficiaries of the rapid rise of prediction markets, according to a new report from Cantor Fitzgerald.
The report argues that while leading platforms such as Kalshi and Polymarket remain private, listed companies are already capitalizing on the trend by integrating event-based trading into their applications.
These markets allow users to buy contracts tied to real-world outcomes, from elections to economic data, with prices reflecting the crowd’s view of probability.
“Prediction markets have burst onto the scene,” wrote Cantor Fitzgerald analyst Ramsey El-Assal, noting that contract volumes are expected to continue their “impressive recent growth trend.”
For companies like Robinhood and Coinbase, the appeal is simple. Prediction markets generate income through trading activity, not by taking the other part of the bets. That model mirrors stock and cryptocurrency trading, where both companies already operate at scale.
Robinhood, in particular, has seen strong initial traction. The company launched its prediction markets hub following the 2024 US election cycle, and the product quickly became one of its fastest-growing lines of business in terms of revenue. Since its launch, users have exchanged billions of contracts linked to sports, politics and macro events.
Coinbase has taken a similar approach, but its launch is at an earlier stage. Its prediction market offering, powered by Kalshi infrastructure, is now available to its entire user base. Although still in its early stages, the product spans categories such as crypto, economics, and global events.
Cantor frames the opportunity based on scale. Platforms with large retail audiences and existing trading infrastructure have a built-in advantage, allowing them to drive liquidity and participation quickly.
The report also rejects the idea that prediction markets are simply games of chance. “A common misunderstanding about prediction markets is that they are gambling platforms in disguise,” he said. Instead, users “trade with other participants by buying contracts that they believe are ‘undervalued’ and selling ‘overvalued’ contracts,” similar to stock markets.
That structure means platforms earn fees for activity, not losses. Prices are updated in real time as new information enters the market, creating what the report describes as “continuously updated forecasts” driven by financial incentives.
Beyond retail use, Cantor sees longer-term applications in hedging and forecasting. “Prediction markets will emerge as a versatile tool for institutional investors,” the report says, noting their potential use in risk management and macroeconomic hedging.
Even so, regulation remains the main uncertainty. The report describes the current environment as “confusing,” with federal and state authorities divided over whether prediction markets are subject to derivatives law or gambling rules.
Cantor’s conclusion is that prediction markets are unlikely to fade away. As the regulatory landscape becomes clearer, companies with large user bases and strong distribution, such as Robinhood and Coinbase, could be in the best position to capitalize.
