Bernstein says Robinhood wants to leverage distribution edge for greater prediction-market share as Coinbase readies December move

Robinhood's push into prediction markets is entering a new phase as the company prepares to launch a CFTC-regulated derivatives exchange through its joint venture with Susquehanna — a move that could have ramifications across the emerging sector's competitive landscape, according to analysts at research and brokerage firm Bernstein. 

In a note to clients on Wednesday, the analysts led by Gautam Chhugani said Robinhood already accounts for more than 50% of sector heavyweight Kalshi's market volumes through an existing collaboration and now wants "to leverage its distribution edge to claim a higher share of the market revenue pool" by adding its own prediction-markets liquidity and exchange infrastructure.

Robinhood said Tuesday that Robinhood Markets, Inc. will control the joint venture and will acquire MIAXdx, a CFTC-licensed Designated Contract Market and Derivatives Clearing Organization.

Bernstein highlighted that prediction markets have become Robinhood's fastest-growing business line since launching earlier this year, with more than 9 billion contracts traded by over 1 million users, estimating an annual run rate above $300 million. In Q3, Robinhood processed 2.3 billion contracts through its prediction-markets hub, and in October alone, it generated $2.5 billion in volume — representing 57% of Kalshi's activity for the month.

"We believe Robinhood will continue distributing Kalshi products but will supplement more event-contracts directly," the analysts said.

Competition widens as major platforms prepare new launches

Robinhood's move comes amid a broader competitive shift. Bernstein said it also expects Coinbase to introduce a prediction market product next month. However, it remains unclear whether the exchange will distribute a partner's markets or launch its own liquidity using a white-label structure, the analysts said.

Last week, the Coinbase app code appeared to include early prediction-market and stock-trading modules. The timing of the leaked interfaces aligns with Coinbase's Dec. 17 "System Update" event, where the crypto exchange says it will unveil new products and business updates.

Meanwhile, Kalshi's main current rival, Polymarket, is re-entering the U.S. market after securing an amended CFTC designation, enabling it to offer its contracts through broker-dealers and futures commission merchants after previously being barred in 2022. As a result, Polymarket will now look to aggressively build new U.S. partnerships, the analysts said.

Kalshi has outpaced rival Polymarket in monthly volume since September, according to The Block's dashboard. In October, Kalshi recorded $4.4 billion in volume, compared with Polymarket's $3 billion, but it remains to be seen how the latest developments will shake up the market.

Bernstein pointed to a structural split emerging between liquidity platforms such as Kalshi and Polymarket, and distribution channels such as retail brokers and crypto exchanges. With 14 million active traders, Robinhood offers what the analysts call the "perfect demographic and product market fit" for prediction markets, enabling it to push more aggressively into revenue capture as the ecosystem expands.

The analysts reiterated their outperform rating on Robinhood with a $160 price target — 38% to the upside from Tuesday's closing price of $115.57 — valuing the company on a 40x multiple of 2027 estimated earnings.

HOOD/USD price chart. Image: The Block/TradingView.