Coinbase and Robinhood's Secret to Growth: Prediction Markets

The growth prospects of Coinbase and Robinhood are being reevaluated as investors look beyond the weak first quarter for crypto trading, with prediction markets emerging as a new area of growth, says Cantor Fitzgerald analyst Ramsey El-Assal. El-Assal notes that investors are now focusing on forward-looking demand trends and product roadmaps, 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 expected to drive growth through new products. Cantor estimates that Coinbase's consumer and institutional trading volumes will be lower than expected, but El-Assal maintains an 'overweight' rating on the stock and raises his price target. Similarly, Robinhood faces near-term pressure but its business model offers some cushion, and the company is also exploring prediction markets and other initiatives. The focus is now on what comes next, with investors watching regulatory developments and new business lines, particularly the prediction markets offering, which has attracted meaningful interest. However, the regulatory environment is uncertain, with a recent lawsuit filed against Coinbase and Gemini over their prediction market offerings, highlighting the debate over whether these products are gambling or swaps.