TLDR
- Bernstein expects Robinhood’s prediction market revenue to reach $1.7 billion in 2028, above the $1.6 billion it expects from crypto trading.
- The firm raised Robinhood revenue estimates by 3% for 2026, 4% for 2027 and 3% for 2028.
- Bernstein estimates Robinhood’s event contract volume will rise 21% from the prior quarter.
- Coinbase’s derivatives and prediction market revenue is forecast to reach $2 billion in 2028, up from about $600 million this year.
- Robinhood reports third-quarter results after U.S. markets close on Tuesday, Oct. 27.
Research firm Bernstein expects prediction markets to bring in more revenue for Robinhood and Coinbase over the next few years. The forecast came in a new report from analyst Gautam Chhugani.
Prediction markets let users trade yes or no contracts on the outcome of real-world events. These products are also called event contracts.
Robinhood has said prediction markets are its fastest-growing business on record. Bernstein’s report gives new estimates on how large that business could become.
Bernstein Raises Robinhood Revenue Estimates
Chhugani repeated his view that Robinhood’s prediction market revenue will reach $1.7 billion in 2028. That would be slightly more than the $1.6 billion he expects the company to earn from cryptocurrency trading that year.
The analyst raised his total revenue estimates for Robinhood by 3% for 2026, 4% for 2027 and 3% for 2028.
He expects event contracts to bring in $650 million in revenue for Robinhood this year. That figure would more than double by 2028 if his forecast holds.
Bernstein also estimates Robinhood will post a 21% quarter-over-quarter increase in event contract volume.
In the second quarter, Robinhood’s prediction market revenue topped its cryptocurrency revenue for the first time on a quarterly basis.
Coinbase Expected to Grow Event Contract Business
The U.S. prediction market industry is mostly controlled by two companies. Still, brokerage firms such as Robinhood and Coinbase are gaining ground.
Coinbase is the largest cryptocurrency trading firm based in the United States. Chhugani forecasts the company will earn $2 billion from event contracts and derivatives products in 2028.
That would be more than triple the $600 million Bernstein expects Coinbase to earn from those products this year. The derivatives category likely includes perpetual futures, often called “perps.”
Coinbase offers event contracts through a partnership with one of the largest prediction market operators. Bernstein pointed to its strong finances and close ties to cryptocurrency as advantages in the space.
Digital currency event contracts are one of the fastest-growing segments of the prediction market industry outside of sports.
Robinhood and Coinbase are not trying to become pure betting companies. Prediction markets earn trading fees on their own, but the larger goal for these firms is to attract new customers.
A Robinhood executive recently said many traders who first join through yes or no contracts go on to trade options and futures. Some also open retirement accounts.
In this way, prediction markets can act as a funnel that brings long-term clients to financial services firms.
Robinhood will report its third-quarter results after U.S. markets close on Tuesday, Oct. 27, which could offer more detail on its prediction market growth.
