Coinbase and Robinhood are increasingly being valued on future product expansion, with prediction markets emerging as a central growth driver despite expected weak first-quarter trading results.
Cantor Fitzgerald maintained “overweight” ratings on both firms, raising price targets as investors shift focus from declining crypto volumes to forward-looking demand and new revenue streams.
“Investors are increasingly treating the quarterly print as backward-looking,”
Said analyst Ramsey El-Assal, pointing to growing interest in prediction markets and product roadmaps.
Trading activity weakened during the quarter as Bitcoin and Ethereum fell 23% and 29%, with Coinbase volumes dropping from about $66 billion in January to $54 billion in March.
Cantor estimates Coinbase’s trading volumes and revenue will fall below expectations, while Robinhood is also expected to see lower activity and reduced net interest income amid softer market conditions.
Despite these pressures, Coinbase shares are up roughly 18% quarter-to-date and Robinhood has gained about 40% in April, reflecting improving sentiment and expectations for future growth.
However, regulatory risks are rising, with the New York Attorney General's Office filing a lawsuit against Coinbase and Gemini over prediction markets, as debate continues over whether such products fall under gambling or derivatives law.
At the time of reporting, Bitcoin price was $77,135.04.