Coinbase and Robinhood Pin Growth Hopes on Emerging Prediction Markets

The growth prospects of Coinbase and Robinhood are increasingly tied to the potential of prediction markets, as per Cantor Fitzgerald analyst Ramsey El-Assal, who notes that investors are now looking beyond the weak first quarter for crypto trading and focusing on future products. El-Assal remarks that investors are treating the quarterly results as backward-looking and are instead focusing on forward-looking demand trends and the product roadmap, including newer offerings like prediction markets. Despite expectations of softer results for the first quarter of 2026 due to a decline in crypto prices and trading activity, both companies are poised for long-term growth driven by emerging areas such as prediction markets. Cantor estimates suggest that Coinbase's consumer and institutional trading volumes will be below Wall Street expectations, but El-Assal maintains an 'overweight' rating and raises the price target, citing improving sentiment and growth drivers. Similarly, Robinhood faces near-term pressure but its business model offers some resilience, with higher volatility potentially lifting trading margins and stronger yields in equities and options offsetting weaker activity. The focus for both stocks is now on future developments, including regulatory changes, new business lines, and initiatives such as tokenization and private market access. The launch of prediction markets by both companies has attracted significant interest, with Cantor maintaining an 'overweight' rating on Robinhood and raising its price target. However, the regulatory landscape for prediction markets remains uncertain, with debates ongoing over whether these products constitute gambling and should be regulated at the state or federal level.