Prediction Markets Are Overtaking Crypto at Robinhood, and Bernstein Just Put a $160 Target on It

Bernstein just told Wall Street something that would have sounded absurd eighteen months ago: prediction markets are about to overtake crypto as a revenue line at Robinhood, not eventually, not theoretically, this quarter.

The research note, published July 20, 2026, raised Bernstein's price target on Robinhood (HOOD) from $130 to $160 while maintaining an Outperform rating. The analysts, led by Gautam Chhugani, built the case around one thesis: broker-dealers, incumbent exchanges, prediction platforms, and crypto-native venues are about to spend the next two years fighting over a fee pool worth more than $70 billion across prediction markets, perpetual futures, tokenized equities, and compute-linked contracts, and of every company positioned for that fight, Robinhood holds the strongest hand.

That thesis is worth unpacking carefully, not as just another bullish note, but for what it reveals about the structural moment prediction markets are in right now.

TL;DR: Bernstein's Robinhood Prediction Markets Thesis in 60 Seconds

• Price target raised $130 → $160, Outperform maintained; lead analyst Gautam Chhugani.

• Q2 2026 prediction-market revenue ≈ $150M, up from ~$104M in Q1, projected to exceed crypto revenue for the quarter.

• Crypto revenue cut hard: −38% QoQ in Q2, full-year crypto estimate −49%.

• Prediction-market revenue 64% CAGR → $1.7B by 2028.

• The engine is Rothera, Robinhood's CFTC-licensed venue: >3.5B contracts in ~6 weeks, 4th-largest venue within a month, ~93% from the FIFA World Cup.

• Robinhood's moat is distribution: 27M funded accounts, 14M MAU reachable at near-zero acquisition cost.

• The bigger prize is a $70B+ fee pool across prediction markets, perps, tokenized equities, and compute contracts.

Bernstein's Robinhood Numbers at a Glance

New products = prediction markets + perpetual futures + Robinhood Chain.

Why Prediction Markets Are Overtaking Crypto at Robinhood in Q2 2026

Bernstein's model projects roughly $150 million in prediction market revenue for Robinhood in Q2 2026, a jump from about $104 million in Q1, and enough to exceed crypto trading revenue for the same period, which the firm expects to fall roughly 38% quarter over quarter on softer-than-expected first-half industry volumes.

The crypto cut matters on its own. Bernstein trimmed its full-year 2026 crypto trading revenue estimate by 49%, pulling total 2026 revenue down 10% to $5.3B, adjusted EBITDA down 19% to $2.8B, and EPS from $2.65 to $2.05. The analysts treat the crypto weakness as cyclical, not structural, and any Bitcoin inflection is upside not in the model. But the size of the revision shows the crypto tailwind that powered Robinhood's earlier growth has meaningfully faded.

Against that backdrop, prediction markets arriving as a replacement, not a supplement, is the kind of structural story that pulls institutional attention. The 64% CAGR Bernstein projects for Robinhood's prediction market revenue through 2028, reaching $1.7 billion, would be one of the more dramatic asset-class transitions in retail brokerage history.

What Is Rothera? Robinhood's CFTC Prediction Market Exchange, Explained

Rothera is the CFTC-licensed prediction market venue Robinhood launched in late May 2026, and it's the piece of infrastructure behind the headline that has gotten far less coverage than its performance deserves. In the roughly six weeks between launch and the Bernstein note, Rothera processed more than 3.5 billion contracts, with FIFA World Cup markets accounting for ~93% of that volume. That places the exchange at the dead center of the biggest sports prediction market event of 2026, and Bernstein notes Rothera became the fourth-largest prediction venue by volume within one month of going live.

Rothera currently handles about 16% of Robinhood's total event-contract volume, with the rest routing to Kalshi, the CFTC-regulated platform that holds the dominant position in US prediction market infrastructure. The cross-venue gap between the two is exactly what our Arbitrage Scanner is built to surface.

That 16% in a month ascent, driven almost entirely by one sporting event, raises the obvious question: what happens after the World Cup? The answer probably decides whether Bernstein's 2028 projections are conservative or aggressive. Convert World Cup traders into habitual participants across elections and economic releases, and the curve steepens. If the volume is tournament-specific, it moderates.

Robinhood's Structural Advantage: 27 Million Accounts at Near-Zero Acquisition Cost

The most analytically interesting part of the note is not the revenue projection, but why Robinhood is positioned to win relative to competing venues.

The argument is simple: new trading products commoditize quickly. It's a pattern from every retail-finance innovation cycle. The product that creates a market attracts competition; competition compresses margins; the winner is usually the player with the lowest customer-acquisition cost and the deepest existing retail relationship. Robinhood's edge in that framework is distribution, with 27 million funded accounts and 14 million monthly active users reachable with new products at near-zero incremental acquisition cost.

For a CFTC-licensed venue, that advantage is especially sharp, because regulatory compliance creates real barriers to entry that slow the commoditization clock. A compliant prediction market venue takes years of regulatory engagement and ongoing compliance spend to build, costs Robinhood has already absorbed through its core brokerage and through standing up Rothera. A new entrant cannot replicate that foundation fast, which gives Robinhood's distribution moat a longer runway than it would have in a purely technology-driven category.

Bernstein models prediction markets, perpetual futures, and Robinhood Chain together contributing 18% of total revenue in 2027 and 23% in 2028, up from ~3% in 2025. That is a three-year climb from 3% to 23% across three new categories, each addressing a different slice of the emerging event-driven trading market.

Robinhood Chain: The On-Chain Half of the Prediction Market Stack

Robinhood Chain, the company's Arbitrum-based Layer 2, live July 1, 2026, is the third leg of the new portfolio beside prediction markets and perpetual futures. It recently crossed $400 million in total value locked (TVL) and is tracking ~$200 billion in annualized DEX volume with ~$50 million in annualized chain fees.

For the prediction market thesis, the chain matters because it's a commitment to on-chain infrastructure that could eventually support fully decentralized prediction market settlement, complementing the centralized, CFTC-regulated Rothera venue. A regulated off-chain exchange plus on-chain settlement would give Robinhood a more complete prediction market stack than any current competitor runs.

The logic of building both at once sharpens in this light. The regulated venue serves the compliance-sensitive institutional and retail audience that cannot touch offshore platforms. The blockchain serves the crypto-native audience that wants on-chain settlement and self-custody. Building both lets Robinhood serve the full spectrum of prediction market participants, not one segment.

Robinhood vs Kalshi vs Polymarket: The 2026 Prediction Market Landscape

Bernstein's thesis, read plainly, implies a specific view of how the competitive map evolves over the next two years.

Kalshi holds the dominant US position, with years of CFTC-regulated infrastructure and the market depth that comes with it. Bernstein treats Kalshi as the primary venue alongside which Rothera operates, not a target to displace. The 16/84 split suggests Robinhood sees the two as complementary distribution channels, not a head-to-head fight for the same users. For the offshore-vs-regulated tension underneath all of this, see our Kalshi vs Polymarket deep dive.

Polymarket remains the largest global prediction market by volume, offshore and crypto-native, with the depth that comes from an international base. The note does not address Polymarket head-on, but the regulatory architecture driving the thesis implicitly positions it as inaccessible to the institutional and compliance-sensitive retail segment Robinhood is targeting. For our Polymarket coverage and the liquidity-provider economics on the platform, see the LP Reward Scanner.

The wider pool includes traditional sportsbooks, dominant in sports volume but under state-by-state gambling rules rather than federal CFTC oversight, and emerging fintechs that may enter once the category shows revenue scale. The first-mover edge in regulated infrastructure, plus the distribution moat Bernstein stresses, suggests the window for new entrants to compete at scale is closing fast. On the regulatory side, our read on the CFTC's new sports-contract rules explains which contracts survive the framework.

How Big Is the $70 Billion Prediction Markets Fee Pool?

Bernstein's $70 billion-plus total addressable fee pool, across prediction markets, perpetual futures, tokenized equities, and compute-linked contracts, is large enough to need grounding.

Perpetual futures make it concrete: the offshore perps market processed over $90 trillion in annual volume in 2025, one of the fastest-growing derivative categories ever. If domestic regulated perps capture even a small fraction at typical fee rates, the revenue is enormous. Kalshi's BTCPERP, CFTC-approved in May 2026 as the first regulated US perpetual futures product, opened that domestic channel. Robinhood's own perps offering, on its regulated rails, is a second major domestic venue.

Prediction markets add to the pool through the macro event-contract market, with multi-hundred-million-dollar daily volumes around major events, and the sports market, with Rothera's World Cup numbers showing billions of contracts in short windows. The $70B figure is a total addressable market across all four asset classes, not a prediction-market-only number, but prediction markets are where Bernstein sees the most immediate revenue inflection.

What the Bernstein Note Means for the Prediction Market Ecosystem

A major bank raising a price target specifically because prediction markets are about to overtake crypto at a public company is a different category of institutional signal than the volume data and platform announcements that have defined prediction market coverage until now.

Price targets are forward-looking, falsifiable commitments backed by detailed modeling. When Bernstein projects $1.7B in prediction market revenue at Robinhood by 2028, that claim gets graded against actual quarterly earnings. That accountability is different from a trend piece. It is institutional capital markets beginning to price prediction market growth into public equity valuations.

The downstream effect is that prediction markets are entering the part of the adoption curve where institutional capital flows in earnest. The note will be read by portfolio managers holding HOOD and by competitors sizing up whether the opportunity justifies their own infrastructure spend. Both audiences act, the first through equity positions, the second through competitive responses.

The single most important sentence in the note, for understanding where this is headed, is the observation that Robinhood can launch new trading products across 27 million funded accounts at near-zero acquisition cost. That sentence describes the end of the phase where prediction markets were a product in search of distribution and the start of the phase where institutional-scale distribution is already in place.

What Happens to Rothera After the World Cup?

The immediate question the thesis raises, which the note acknowledges through its focus on Rothera's World Cup-driven volume, is what the user base looks like when the tournament ends.

World Cup markets are an exceptional volume event: massive global interest, clean discrete outcomes, short horizons, broad cultural reach. The user who traded Argentina vs France is not automatically the user who will trade Fed rate decisions or US Senate races. Converting sports traders into habitual, cross-category participants is the growth challenge that decides whether the 64% CAGR is achievable.

The evidence from Kalshi's own trajectory is encouraging. The platform grew from politics-and-economics-focused to sports-dominant without losing its core macro user base, with the sports volume adding to existing activity rather than replacing it. If Rothera follows that pattern, accumulating a diverse event-contract base that engages across categories, the projections get more credible.

Taken as a whole, the prediction market category looks to be at the precise inflection where the infrastructure has matured, the regulatory framework has clarified, and distribution has broadened enough that institutional capital can treat event contracts as a serious asset class rather than an interesting experiment. Bernstein's note is one of the clearest signals that the inflection is happening now, and the $70B fee pool they're projecting as the prize suggests the next two years will be fiercely competitive.