New Money, New Markets: Robinhood and Coinbase Take on Predictions

Robinhood and Coinbase are diving into prediction markets, but they're playing the game differently. A recent study by a major investment bank suggests Robinhood might have the upper hand. Here's why. First, let's talk about who's jumping into these prediction markets. Turns out, users on Robinhood and Coinbase are way more into this than the average investor. In fact, they're about nine times more likely to bet on outcomes, especially when it comes to big economic and political events. Sports aren't far behind, either. Now, here's where things get interesting. Robinhood users seem more willing to put fresh cash into these prediction markets. About half of them plan to use new money, while only a small fraction will sell off their stocks or crypto. On the other hand, Coinbase users are split. Half plan to add new money, but the other half will sell crypto to fund their bets. This could be a problem for Coinbase because it might mean less crypto trading overall.Because of this, analysts think Robinhood could see a bigger boost in revenue from prediction markets. Even though Coinbase users might allocate a slightly larger chunk of their portfolio to predictions, Robinhood's approach could pay off more in the long run. Robinhood's prediction market business is already looking strong, with a projected $300 million run rate for the last quarter of the year. That's not all. The company has seen a massive 2. 5 billion contracts in October alone. This has led to a 6-7% increase in revenue estimates for 2026-2027. Meanwhile, Coinbase is set to launch its own prediction market product. While this is a step in the right direction, it's not enough to change the current outlook. The bank hasn't even factored in any prediction market upside for Coinbase yet. They're still unsure about the final product and how it will affect existing crypto trading. All of this has led to some changes in stock prices. Robinhood saw a 2. 6% increase in early trading, while Coinbase was up by 2%.