Bernstein sees prediction markets as new growth driver for Robinhood

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New growth driver for Robinhood

Prediction markets could overtake crypto

Bernstein identifies prediction markets as Robinhood’s main near-term growth driver. Analysts estimate that the segment has already become large enough to compete with cryptocurrency trading in terms of revenue.

Bernstein expects Robinhood’s prediction market revenue to grow at an average annual rate of 64% through 2028 and reach $1.7 billion.

Rothera, a Robinhood-linked exchange licensed by the U.S. Commodity Futures Trading Commission and launched in late May, has already processed more than 3.5 billion contracts. Around 93% of this volume came from markets related to the FIFA World Cup.

Just one month after its launch, Rothera became the fourth-largest prediction market platform by trading volume. According to Bernstein, it handles around 16% of Robinhood’s total event contract volume, while the remainder is routed to Kalshi.

Analysts believe the second quarter of 2026 could become the first period in which prediction markets generate more revenue for Robinhood than cryptocurrency trading. Bernstein forecasts around $150 million in prediction market revenue, compared with $104 million in the first quarter. At the same time, cryptocurrency trading volumes could decline by approximately 38% quarter over quarter.

Crypto revenue expected to decline

Bernstein cut its forecast for Robinhood’s 2026 cryptocurrency trading revenue by 49%. The revision reflects weaker-than-expected industry trading volumes during the first half of the year.

As a result, the firm lowered its total revenue estimate for 2026 by 10% to $5.3 billion. Its adjusted EBITDA forecast was reduced by 19% to $2.8 billion, while projected earnings per share fell from $2.65 to $2.05.

However, analysts view the weakness in the cryptocurrency segment as cyclical rather than structural. They see a potential renewed rise in the price of Bitcoin as an additional upside factor that is not currently included in their base-case forecast.

Why prediction markets are growing

The growth of prediction markets is largely driven by a packed calendar of events on which users can trade contracts almost every day. In spring, the NBA playoffs and other major sporting competitions attracted significant attention, while the FIFA World Cup became the main driver during the summer. It provided platforms with a huge stream of new markets, ranging from the winners of individual matches to the final tournament outcome and player statistics.

Demand is also being supported by heightened geopolitical tensions. Military conflicts, Donald Trump’s trade wars, disputes over tariffs, and tensions in U.S. relations with other countries constantly create new questions about oil prices, government decisions, and the development of international crises. For prediction markets, this uncertainty creates new contracts, while cryptocurrency trading depends more heavily on overall investor sentiment and price direction.

Robinhood is also expanding the use of perpetual futures in Europe.

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