Trading venues Robinhood (HOOD) and Coinbase (COIN) could emerge as the main public market beneficiaries of the rapid rise in prediction markets, according to a new report from Cantor Fitzgerald.
The report claims that while leading platforms like Kalshi and Polymarket remain private, listed companies are already capitalizing on the trend by integrating event-based trading into their apps.
These markets let users buy contracts tied to real-world outcomes, from elections to economic data, with prices that reflect the crowd’s view of probability.
“Prediction markets have exploded onto the scene,” wrote Cantor Fitzgerald analyst Ramsey El-Assal, noting that contract volume is expected to continue its “impressive recent growth trend.”
For companies like Robinhood and Coinbase, the appeal is straightforward. Prediction markets generate revenue through trading activity, not by taking the other side of bets. That model mirrors stocks and crypto trading, where both companies already operate at scale.
Robinhood in particular has seen strong early traction. The company launched its prediction market hub after the 2024 US election cycle, and the product quickly became one of its fastest-growing businesses in terms of revenue. Since launch, users have traded billions of contracts linked to sports, politics and macro events.
Coinbase has taken a similar approach, but is earlier in its rollout. Its prediction market offering, powered by Kalshi’s infrastructure, is now available across its user base. While still in its early stages, the product spans categories such as crypto, finance and global events.
Cantor frames possibility as a function of scale. Platforms with large retail audiences and existing trading infrastructure have a built-in advantage that enables them to drive liquidity and participation quickly.
The report also pushes back on the idea that prediction markets are simply gambling. “A common misconception about prediction markets is that they are gambling platforms in disguise,” it said. Instead, “users trade against other participants by buying contracts they believe are ‘underpriced’ and selling ‘overpriced’ contracts,” similar to stock markets.
That structure means platforms earn fees from activity, not losses. Prices are updated in real time as new information comes to market, creating what the report describes as “continuously updated forecasts” driven by financial incentives.
Beyond retail use, Cantor sees long-term uses in hedging and forecasting. “Prediction markets will emerge as a versatile tool for institutional investors,” the report said, pointing to potential use in risk management and macro hedging.
Still, regulation remains the main uncertainty. The report describes the current environment as “messy,” with federal and state authorities split on whether prediction markets fall under derivatives legislation or the rules of the game.
Cantor’s bottom line is that prediction markets are unlikely to fade. As the regulatory picture becomes clearer, companies with large user bases and strong distribution, such as Robinhood and Coinbase, may be in the best position to capitalize.
