Research from Japanese investment bank Mizuho Bank (MFG) suggests that Robinhood (HOOD) could see a higher rise in returns from prediction markets than Coinbase (COIN) as users leverage new cash rather than selling existing holdings.
“Given our research showing that users of the HOOD platform are more likely to fund their prediction market portfolios with new capital, we expect greater revenue returns for COIN than for HOOD,” analysts Dan Dolev and Alexander Jenkins said in a Tuesday report.
Analysts found that Robinhood and Coinbase users are far more likely to trade prediction markets than other investors, and their activity is skewed toward economic and political events. The bank raised its earnings forecast for Robinhood, but lowered its price target for Coinbase over concerns that prediction market activity could cannibalize crypto trading.
Mizuho surveyed more than 230 Robinhood and Coinbase users and found that respondents who did not use either app were approximately nine times more likely to participate in prediction markets. The bank said the most popular themes among respondents were economic events (81%) and political events (49%), followed closely by sports (47%).
The report says how users plan to fund these trades is where the two platforms diverge. About 50% of Robinhood respondents said they expected to use their new funds to trade in prediction markets, but selling traditional portfolios and cryptocurrencies ranked much lower (12% and 10%, respectively).
In contrast, Coinbase users most often cited selling cryptocurrencies (37%) and adding new funds (37%) as their primary funding sources, raising the risk that analysts said prediction markets could cannibalize existing crypto trading revenue.
Analysts said this funding structure should result in larger medium-term revenue growth for Robinhood than Coinbase, even though they expect COIN users to allocate a slightly higher share of their portfolios to prediction markets within about a year (15% vs. 13% for HOOD).
With Robinhood’s Prediction Markets business having a run rate of about $300 million in the fourth quarter and on track for about 2.5 billion contracts in October, Mizuho announced a 6% to 7% increase in the company’s 2026-2027 revenue forecast. The bank maintained an outperform rating on the stock and a $172 price target.
Coinbase plans to launch a market prediction product on Wednesday, which Mizuho sees as a positive step, but not yet enough to change the numbers.
The bank said Coinbase’s model does not incorporate any upside in the prediction market, given the uncertainty surrounding the final product design and economics, as well as the potential sale of cryptocurrencies to fund prediction trading. Mizuho also noted weaker-than-expected trends in the fourth quarter and the decline in Bitcoin. BTC$87,018.43 They lowered Coinbase’s price target from $320 to $280 and reiterated their neutral rating on the stock.
Robinhood rose 2.6% to $122.53 in early trading. Coinbase traded up 2% at $257.63.
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