Trading platforms Robinhood (HOOD) and Coinbase (COIN) could become the biggest public beneficiaries of the rapid rise in prediction markets, according to a new report from Cantor Fitzgerald.
The report claims that while major platforms like Kalshi and Polymarket remain private, listed companies are already exploiting this trend by integrating event-driven 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 public’s view of the odds.
“Prediction markets have exploded onto the scene,” wrote Cantor Fitzgerald analyst Ramsey El-Assal, noting that contract volumes are expected to continue their “recent impressive growth trend.”
For companies like Robinhood and Coinbase, the appeal is simple. Prediction markets generate revenue through trading activities, not by taking the other side of bets. This model mirrors the trading of stocks and cryptocurrencies, in which both companies already operate on a large scale.
Robinhood, in particular, saw strong early traction. The company launched its prediction markets hub after the 2024 U.S. election cycle, and the product quickly became one of its fastest-growing lines of business in terms of revenue. Since launch, users have traded billions of contracts related to sports, politics and macro events.
Coinbase has taken a similar approach, but is rolling out earlier. Its prediction market offering, powered by Kalshi’s infrastructure, is now available to its entire user base. Although still in its early stages, the product covers categories such as crypto, economics, and world events.
Cantor defines opportunity based on scale. Platforms with a large retail audience and existing trading infrastructure have an intrinsic advantage, allowing them to quickly generate liquidity and participation.
The report also pushes back against the idea that prediction markets are just gambling. “A common misunderstanding about prediction markets is that they are gambling platforms in disguise,” it says. Instead, users “trade against other participants by buying contracts they believe are ‘undervalued’ and selling ‘overvalued’ contracts”, much like stock markets.
This structure means that platforms collect fees on activity, not losses. Prices are updated in real time as new information comes into the market, creating what the report describes as “continuously updated forecasts” driven by financial incentives.
Beyond retail use, Cantor sees longer-term applications in the areas of hedging and forecasting. “Prediction markets will emerge as a versatile tool for institutional investors,” the report says, highlighting their potential use in risk management and macro hedging.
Yet regulation remains the main uncertainty. The report describes the current environment as “messy,” with federal and state authorities divided on whether prediction markets fall under the derivatives law or gaming rules.
Cantor’s bottom line is that prediction markets are unlikely to fade. As the regulatory framework becomes clearer, companies with large user bases and strong distribution, such as Robinhood and Coinbase, may be best positioned to capitalize.
