Robinhood and Coinbase could emerge as key listed beneficiaries of the rapidly growing trend in prediction markets, a forecast said.

On April 14, blockchain outlet CoinDesk reported that Cantor Fitzgerald said private platforms Kalshi and Polymarket are leading the market. Among listed companies, it assessed that the two firms are already shoring up a base to benefit by integrating event-based trading into their apps.

Prediction markets are structured around buying and selling contracts linked to outcomes in the real world, such as elections, economic indicators, sports and macro events. Prices reflect probabilities as judged by participants. Cantor Fitzgerald analyst Ramzi Elassal said prediction markets have risen sharply and expected contract trading volume to sustain its recent strong growth trend.

The report highlighted business structure as the key. Robinhood and Coinbase do not take bets by standing on the opposite side of investors. They earn revenue from trading activity. That structure resembles the stock and crypto trading businesses the two companies already run at scale. Platforms generate revenue from transaction fees rather than user losses, and prices adjust in real time as new information flows in.

Robinhood was assessed as currently leading. Robinhood launched a prediction market hub after the 2024 U.S. presidential election cycle, and it became one of the fastest-growing business segments by revenue soon after launch. Since launch, users have traded billions of contracts tied to sports, politics and macro events.

Coinbase is also moving in a similar direction. Coinbase's prediction market service is offered to its overall user base based on Kalshi infrastructure, and covers multiple categories including crypto, the economy and global events. Its rollout is at an earlier stage than Robinhood's.

Cantor Fitzgerald said scale is central to prediction market competitiveness. Platforms with a large retail investor base and existing trading infrastructure have a first-mover effect that can quickly lift liquidity and participation. It judged that growth can be much faster when an operator that already has user touchpoints and distribution adds a new market.

It also drew a line against views that see prediction markets only as a variant of gambling. Cantor Fitzgerald noted that the misconception that prediction markets are gambling platforms in disguise is common, but explained that users buy contracts they see as undervalued and sell contracts they see as overvalued. It argued they are closer to trading markets where price discovery occurs among participants, like stock markets.

It also raised the possibility that, over the long term, prediction markets may not remain limited to services for retail investors. Cantor Fitzgerald said prediction markets will emerge as a multipurpose tool for institutional investors, and it saw room for use in risk management and macro hedging. It said they could be used as a market outlook and risk management tool beyond simple event trading.

Regulation remains the biggest variable. U.S. federal and state authorities are currently split over whether to view prediction markets under derivatives regulation or treat them under gambling rules. Cantor Fitzgerald described the current regulatory environment as "confusing."

As a result, even if prediction markets keep growing, the actual scale of benefits is likely to depend on the pace of regulatory clarification. It said it is clear that platforms with large user bases and strong distribution capabilities have an advantage. That is why Robinhood and Coinbase are cited as candidates to absorb the fastest market expansion effect after regulatory uncertainty is resolved.