The money has to come from somewhere.
And when it comes to prediction markets, that could be an issue for Coinbase relative to competitors, according to a survey detailed in a Tuesday note from Mizuho Securities.
After fielding responses from more than 230 Coinbase and Robinhood users, analysts at the investment banking firm found that 50% of the retail brokerage’s customers plan to fund prediction market wagers with fresh cash, compared to 37% at the crypto exchange.
Although 37% of surveyed users indicated that they are just as likely to fund bets at Coinbase with new deposits, the analysts highlighted “cannibalization concerns” that could dull the San Francisco-based exchange’s anticipated push into the space.
“We remain cautious on the medium-term upside to sales from prediction markets given potential cannibalization from crypto sales,” they wrote, while trimming their price target for Coinbase shares to $280 from $320 and reiterating a “Neutral” rating.
On Wednesday, Coinbase is expected to reveal several new products, which could position the exchange as a more direct competitor to Robinhood, which began supporting speculation on sports and politics earlier through Kalshi earlier this year.
Robinhood has also dabbled overseas with tokenization, among the areas that some analysts believe Coinbase’s refresh will also focus on. On Monday, analysts at investment bank Compass Point foresaw tokenized equities as a notable opportunity for Coinbase.
Mizuho analysts wrote that their price-target adjustment considered “softer than initially expected” trends over the past few months, marked by a historic liquidation event and subsequent Bitcoin plunge from an all-time high above $126,000 in October to $87,690 on Tuesday.
Mizuho analysts found that Robinhood and Coinbase users were nine times as likely to engage with prediction markets than someone who didn’t use either apps. Given the speculative nature of crypto, Salman Banaei, general counsel at real-world asset infrastructure provider Plume, told Decrypt that it makes sense.
“The Venn Diagram of traders in those two markets has significant overlap,” he said. “People want large returns, so when crypto is bearish, prediction markets look pretty good.”
Has crypto demand been absorbed by prediction markets? Data suggests that the answer is, to some extent, yes. During same period RWA demand (as measured by TVL), has also grown from $8b to $18b during the same period (https://t.co/pNs25x4m39).
Crypto is metamorphosizing to… pic.twitter.com/OlAsW84wEV
— Salman Banaei (@banamlas) December 16, 2025
Still, Mizuho’s survey suggests that Coinbase users aren’t being gatekept from prediction markets by the exchange’s current lack of support. Most Robinhood and Coinbase users already use them, within their apps or elsewhere on the internet, the analysts found.
Retail-facing firms may see opportunities in prediction markets, but the New York Stock Exchange’s parent company also inked a $2 billion investment into Polymarket this year, broadening the distribution of its data among Wall Street firms.
Last week, Jeffrey Sprecher, CEO of Intercontinental Exchange, told Bloomberg News that half of the exchange operator’s 10,000 customers are interested in prediction markets.
Coinbase shares rose just over 1% to $253 on Tuesday, according to Yahoo Finance. The company’s stock price has dipped 10% over the past month, but it remains slightly up on the year.
