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Bernstein raised its price target on Robinhood Markets (NASDAQ: HOOD) from $130 to $160, maintaining an Outperform rating, with senior digital assets analyst Gautam Chhugani pointing to three converging bets: prediction markets through the Rothera exchange, the company's newly launched Ethereum Layer 2 blockchain, and tokenized equities paired with perpetual futures. With HOOD trading around $102.25 as of July 20, the revised target implies roughly 57% upside heading into the company's Q2 earnings call on July 29.

Prediction markets now driving the thesis

Chhugani's note projects that prediction market revenue will reach $1.7 billion by 2028, growing at a 64% compound annual rate. That timeline is already tracking. Robinhood's prediction markets brought in $104 million in Q1 2026, up from roughly 1% of net revenue a year earlier to 10% now. By June 25, Q2 figures were already at approximately $123 million, putting the annualized run rate near $500 million. Bernstein estimates full-year 2026 prediction markets revenue at approximately $600 million, a figure that sits between the current Q2 tracking data and the 2028 target and helps gauge the pace of the ramp. Crypto trading revenue, by contrast, dropped 47% year over year to $134 million in Q1. Bernstein now expects prediction markets to surpass crypto as a revenue line in Q2. "Revenue from prediction markets would rise to hit $1.7 billion by 2028," Chhugani wrote, adding that prediction markets, perpetual futures, and tokenized equities "could account for nearly one-quarter of Robinhood's revenue by 2028."

Anchoring this prediction markets push is Rothera, a CFTC-licensed derivatives exchange Robinhood built on its acquisition of MIAXdx (previously known as LedgerX, an early pioneer in CFTC-licensed bitcoin derivatives that went through multiple rebrands before the Robinhood deal), developed in partnership with Susquehanna International Group, a major quantitative trading firm. Rothera received CFTC approval to self-certify soccer event contracts in May 2026, enabling it to offer FIFA World Cup prediction markets, and those contracts were a significant driver of its early volume. Rothera generated over $9 billion in trading volume and 900 million trades in its first week. It currently holds 16% of event contract volume on Robinhood's platform. The company's current revenue-sharing arrangement with Kalshi, its prediction market distribution partner, pays out 2 cents per contract. Through Rothera's vertical integration, Robinhood aims to drop consumer pricing to 0.6 cents while capturing more of the margin itself. Bernstein describes the Kalshi relationship as "frenemy": Robinhood still distributes Kalshi contracts while building a competing exchange underneath them.

Robinhood Chain: real traction, but not quite the RWA story being told

Robinhood launched its own Ethereum L2, Robinhood Chain, on July 1 at a London event titled "The World Is Flat." Built on the Arbitrum Orbit stack (Arbitrum is a scaling framework for Ethereum), the chain is designed for financial services and real-world assets (RWAs) and is described by Robinhood as permissionless and AI-native, reflecting a stated architectural positioning rather than a marketing claim. Infrastructure partners include Chainlink, Alchemy, BitGo, Uniswap, and 1Inch. On-chain data tells a genuine growth story: total value locked (TVL) crossed $400 million within three weeks of launch, daily transactions peaked at 10.4 million, block confirmation times run at roughly 100 milliseconds, and cumulative DEX (decentralized exchange) volume has surpassed $800 million. Morpho, a lending protocol, holds approximately $133 million of that TVL on its own.

There is a notable tension in those numbers, however. While the chain was positioned around tokenized equities and RWAs, reporting from KuCoin and CryptoTimes confirms that memecoins have been driving a disproportionate share of early on-chain activity. The stated RWA thesis and the actual user behavior on the chain are not yet aligned. CEO Vlad Tenev has publicly called on third-party developers to build with stock tokens and RWAs, and Robinhood has committed $1 million to the 2026 Arbitrum Open House buildathon to encourage that activity. Whether developers show up in meaningful numbers is an open question.

What this means outside the United States

Robinhood's stock token product is available in 120-plus countries, with the US explicitly excluded. The catalog now covers more than 2,000 tokens across markets including Nigeria, Kenya, South Africa, India, Pakistan, and Bangladesh. For retail investors in those regions, the product represents round-the-clock access to fractional exposure to US-listed equities, something historically blocked by brokerage infrastructure gaps, forex controls, and high minimum investment thresholds.

Three significant caveats apply. First, Robinhood's stock tokens are tokenized debt securities, not equity. Holders carry no voting rights, no shareholder protections, and no direct ownership of the underlying shares. This distinction matters most in markets where investor disclosure frameworks are thin. Second, Robinhood has no announced regulatory presence in India, Nigeria, Kenya, or Pakistan. Use of the product from those jurisdictions may fall into grey territory under local securities law. India's SEBI restricts direct retail access to derivatives listed on foreign exchanges. Third, the 7% APY offered through Robinhood Earn on the USDG stablecoin (a dollar-backed digital currency) is attractive in high-inflation markets like Nigeria and Pakistan. The product carries insurance through Lloyd's of London, a material detail for audiences in markets with limited deposit protection norms, though fiat on-ramp friction and KYC requirements remain practical barriers.

The broader prediction markets thesis also resonates in Africa independently. PwC data from January 2026 identified Nigeria as one of the world's most active crypto markets by retail participation, providing a substantial ready-made user base for prediction market products. Bayse Markets (formerly Gowagr), described as Africa's largest prediction market, already runs USD/NGN, GBP/USD, and EUR/USD binary outcome contracts targeting Nigerian forex traders. Luno, a South African company, launched Bitcoin and Ethereum direction-prediction products in Nigeria in early 2026; its move into the Nigerian market illustrates the intra-continental dynamics beginning to shape Africa's fintech landscape. Regulatory ambiguity remains the main constraint across the continent, as prediction markets sit in an undefined space between gambling and financial products in most African legal frameworks. Bernstein projects global prediction market volume will reach $1 trillion by 2030, a macro backdrop that connects directly to both the 64% CAGR in the Robinhood thesis and the organic fintech growth visible in African markets.

Looking ahead

Bernstein models a 32% revenue CAGR, 47% EBITDA CAGR, and 49% EPS CAGR for Robinhood through 2028, with a 2028 EPS estimate of $4.56 that sits 36% above Wall Street consensus. The $160 target is based on a 35x forward earnings multiple. Of 25 analysts covering HOOD, 17 rate it a Strong Buy, 2 rate it a Moderate Buy, 5 rate it a Hold, and 1 rates it a Strong Sell. The 19 bullish ratings out of 25 reflect a broad base of conviction, though the average consensus price target sits at $107.12, well below Bernstein's call. Q2 earnings on July 29 will be the first real test of whether the prediction markets trajectory holds after World Cup contract volumes normalize. Bernstein's 2028 projections, including the $1.7 billion revenue target and 64% CAGR, represent the firm's explicit answer to the structural sustainability question: the model is built to capture a post-World Cup trajectory, not merely the event-driven spike. July 29 will begin to test whether that modelling holds.