Bernstein lifts Robinhood target as prediction markets eclipse crypto
Bernstein raised its Robinhood price target to $160, arguing the broker's massive retail user base will drive prediction markets to overtake cryptocurrency as its primary revenue source by mid-2026.
Bernstein raised its price target for Robinhood to $160 from $130 on Monday while maintaining an Outperform rating. Analysts led by Gautam Chhugani project the brokerage will capture a dominant share of a fee pool exceeding $70 billion across prediction markets, perpetual futures, tokenized equities, and compute-linked contracts.
The most immediate driver of this growth is event contracts. Bernstein models prediction market revenue hitting roughly $150 million in the second quarter of 2026, surpassing crypto trading revenue for the first time. This shift occurs as analysts cut their 2026 crypto trading revenue estimate by 49% due to weak industry volumes in the first half of the year.
Much of this event-contract volume is flowing through Rothera, a CFTC-licensed prediction exchange Robinhood launched in late May. The platform has processed over 3.5 billion contracts, with FIFA World Cup markets driving 93% of that activity. Within a month, Rothera became the fourth-largest prediction venue globally, accounting for 16% of Robinhood's total event-contract volume, while the remainder routes to Kalshi.
The downward revision to crypto estimates dragged Bernstein's 2026 total revenue forecast down 10% to $5.3 billion. Adjusted EBITDA is now expected to fall 19% to $2.8 billion, with earnings per share dropping to $2.05 from a previous estimate of $2.65. However, the firm views this crypto weakness as cyclical rather than structural, leaving any positive bitcoin price movements as unmodeled upside.
Bernstein's bullish valuation relies on Robinhood's distribution network as its primary competitive moat. Because new trading products commoditize rapidly, customer access becomes the limiting factor for growth. Robinhood can introduce new assets to its 27 million funded accounts and 14 million monthly active users at virtually no acquisition cost.
The analysts expect prediction markets, perpetual futures, and Robinhood Chain to grow from 3% of total revenue in 2025 to 23% by 2028. Robinhood Chain, an Arbitrum-based Layer 2 network that went live on July 1, recently crossed $400 million in total value locked. It is tracking $200 billion in annualized decentralized exchange volumes and generating $50 million in annualized chain fees. Bernstein applied a 35x forward earnings multiple to its 2028 target of $4.56 in earnings per share, which is 39% above the current consensus.
