Prediction Market Sector Splits into Liquidity Providers and Distribution Networks

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Prediction Market Sector Splits into Liquidity Providers and Distribution Networks

Bitget-RWA2025/11/26 11:42

By:Bitget-RWA

- Robinhood and Coinbase expand prediction markets via CFTC-regulated platforms, targeting $300M+ annualized revenue for Robinhood by 2025. - Kalshi ($11B valuation) and Polymarket ($12–15B) compete with regulated vs. decentralized models, while Nevada court challenges threaten $650M contracts. - Sector fractures into liquidity platforms (Kalshi/Polymarket) and distribution channels (Robinhood/Coinbase), with $51.39B combined trading volume in 2025. - Regulatory alignment becomes critical as Polymarket par

The prediction market industry is experiencing swift changes as leading fintech companies such as

Robinhood

and

Coinbase

look to broaden their presence, Bernstein analysts report. Robinhood, which currently accounts for more than half of Kalshi's trading activity through a partnership, plans to use its extensive reach to secure a greater portion of market revenues by introducing its own CFTC-approved derivatives exchange

according to Bernstein analysts

. This strategy puts Robinhood in direct competition with platforms like Kalshi and Polymarket, which

experienced significant expansion in 2025

as traders wager on topics ranging from political races to cryptocurrency trends.

Kalshi, a platform regulated by the CFTC, recently secured $1 billion in funding at a valuation of $11 billion,

narrowing the gap with Polymarket’s reported valuation target of $12–$15 billion

. Kalshi’s regulatory compliance provides legal certainty and access to fiat currency, setting it apart from Polymarket’s decentralized, crypto-focused approach. Nonetheless, regulatory hurdles remain, especially in Nevada, where a court decision placed the platform under state gaming laws,

which could affect $650 million worth of derivatives contracts

. At the same time, Robinhood’s collaboration with Susquehanna to purchase MIAXdx—a derivatives exchange licensed by the CFTC—marks a move toward building institutional-level liquidity infrastructure

according to Bernstein analysts

Coinbase is also making its entry, with leaked application code and images indicating it plans to launch a Kalshi-backed prediction market at its December 17 event. The new platform will enable users to trade binary contracts on a variety of events, from elections to crypto achievements, with results verified by reliable data providers

according to reports

. This move aligns with a wider industry shift: Yahoo Finance has teamed up with Polymarket, while

Gemini and Trump Media & Technology Group are working on federally regulated prediction markets

. The total trading volume in the sector has

climbed to $17 billion for Kalshi and $34.39 billion for Polymarket

, signaling increasing acceptance among mainstream users.

As regulatory loopholes close, compliance is becoming a key factor for success. Polymarket’s recent approval from the CFTC and its data partnership with Intercontinental Exchange

underscore the value of regulatory alignment

. Bernstein analysts estimate that Robinhood’s annualized revenues from prediction markets could

surpass $300 million by 2025

, fueled by its 14 million active users and robust distribution tactics. However, risks to market integrity persist: the sports-betting controversies of 2025 highlight the ongoing need for strong governance and transparency to prevent reputational and regulatory issues

according to reports

The prediction market ecosystem is dividing into liquidity providers (Kalshi, Polymarket) and distribution platforms (Robinhood, Coinbase). As Robinhood and Coinbase incorporate regulated systems, the industry’s expansion will depend on balancing regulatory compliance with innovation. Bernstein continues to rate Robinhood as “outperform,”

setting a price target of $160 per share

, and suggests that Coinbase’s new prediction market could transform user participation in event-driven trading.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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