Robinhood Markets shares received a higher price target from Bernstein analysts following projections that prediction markets could generate up to $1.7 billion in revenue by 2028. This recommendation is not based on conventional crypto trading activity on the brokerage platform. Instead, Bernstein believes Robinhood’s next growth phase will be driven entirely by equity tokenization and prediction markets.
This market betting segment is projected to be Robinhood’s fastest-growing business line moving forward. The $1.7 billion revenue figure reflects a compound annual growth rate (CAGR) of 64%.
Dedicated Infrastructure for Three New Arenas
Robinhood’s expansion does not stop at prediction markets. The company is gearing up to compete across three key battlegrounds: prediction markets, perpetual futures trading, and tokenized real-world assets (RWAs).
As a foundation for its RWA ambitions, the company is building its own network infrastructure dubbed Robinhood Chain. This standalone network operates as a Layer-2 built on Arbitrum technology, specifically designed to support proprietary infrastructure for recording ownership of real-world assets in the form of digital tokens.
Robinhood’s new focus aligns with the broader RWA trend across the industry. Tracking data from RWA.xyz shows that the market value of tokenized asset instruments has grown to nearly $2 billion so far this year.
Not the Only Player
The push toward financial asset tokenization is not driven by Robinhood alone. Brokerage firm Alpaca, alongside Broadridge Financial Solutions, recently integrated a suite of shareholder governance tools directly into Alpaca’s tokenization network.
Elsewhere, tokenization platform Securitize has made its move by partnering with investment bank Cantor Fitzgerald. The two are collaborating to design initial public offering (IPO) infrastructure that runs entirely on blockchain rails.
A Pattern of Revenue Rotation
Robinhood’s shift from its original business model to new verticals has precedent in Bernstein’s research. Back in April, the analyst firm issued a similar thesis for IREN, forecasting that the mining company’s cloud AI computing division would become its primary revenue driver. A similar growth rotation pattern is now emerging in the retail financial brokerage sector.
Crypto brokerages appear to realize that relying solely on standard trading volume is no longer sufficient. With instruments like prediction markets offering multi-billion-dollar revenue potential over the next few years, the brokers’ strategic expansion makes clear sense.
Source: Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
