Cantor Fitzgerald Says Robinhood and Coinbase Stocks Could Be Public-Market Winners as Prediction Markets Explode

On Tuesday, Cantor Fitzgerald released a new report identifying Robinhood (HOOD) and Coinbase (COIN) as the primary public-market winners in the rapid rise of prediction markets.

Retail Power Creates an Automatic Advantage

The primary reason these two firms are pulling ahead is their massive existing reach. While private platforms like Kalshi and Polymarket are popular, listed companies are using their current tools to move much faster.

Analyst Ramsey El-Assal wrote today that “prediction markets have exploded onto the scene” and expects volumes to keep growing. The business model for these firms is straightforward. They earn money from trading fees rather than betting against their customers. This setup mirrors how they already handle stocks and crypto, allowing them to drive liquidity almost instantly. Robinhood has seen especially fast growth, with its prediction hub becoming one of its top revenue lines since the 2024 election cycle.

Canor Says Prediction Markets Function like Financial Forecasting Tools

The report pushes back on the idea that these platforms are just for gambling. Instead, Cantor argues that prediction markets function more like financial forecasting tools.

Investors on these platforms buy contracts they think are underpriced and sell those they believe are overpriced. This process creates what the report calls “continuously updated forecasts” driven by financial rewards. This specific mechanism leads us to the fact that these markets could eventually serve as hedging tools for big institutions. Professional investors might use them to manage risk or protect against sudden macro events.

The Legal Situation Is ‘Messy’

The biggest hurdle for this new industry remains the legal landscape. Federal and state officials are currently split on whether these contracts should be treated as derivatives or as a form of betting.

Cantor describes the current legal situation as “messy,” yet the firm believes the trend is here to stay. Companies with large distribution networks and strong infrastructure are in the best spot to win as the rules become clearer. Bloomberg notes that both Coinbase and Robinhood are already seeing billions of contracts traded across sports, politics, and global economic events.

Market Data Shows High Growth Potential

We used the TipRanks’ Stock Comparison Tool to look at the current standing of these two firms. The data shows that analysts are largely bullish, with Coinbase holding a Moderate Buy rating and Robinhood sitting at a Strong Buy.

The comparison reveals a significant upside for both companies, with price targets suggesting potential gains of over 30% from current levels. This strong analyst consensus supports the idea that the move into prediction markets is being viewed as a major long-term catalyst for their stock prices.