Robinhood Expands Prediction Markets Push with Crypto.com and OG

Robinhood Markets Inc. (NASDAQ: HOOD) is expanding its prediction markets business through a multi-year deal with Crypto.com, according to a recent report by The Wall Street Journal. This move comes as Robinhood builds out a prediction markets network that already includes Kalshi and Rothera, an independently managed exchange venture with Susquehanna International Group.

As part of the deal, Robinhood will add contracts from Crypto.com's prediction-markets platform, OG, to its app and take minority stakes in both Crypto.com and OG. This partnership is expected to allow Robinhood to offer better pricing and a wider range of contracts, while also giving the brokerage more "skin in the game," according to JB Mackenzie, who runs Robinhood's futures and prediction markets business.

Crypto.com CEO Kris Marszalek told The Wall Street Journal that OG has grown about 20-fold this year. He believes that bringing its contracts onto Robinhood could draw more retail and institutional trading to the platform, with institutions particularly interested in trading against retail flow.

Benefits for Both Parties

For Robinhood, the deal provides another source of contracts and pricing, while OG gains access to Robinhood's retail customer base. This partnership is expected to be mutually beneficial, with both parties looking to expand their user base and increase trading activity.

Robinhood has already seen significant growth in its prediction markets business, with the company reporting $156 million in event contract revenue in the second quarter, up more than 10-fold year over year. In July, Robinhood customers traded 6.1 billion event contracts, roughly 20 times the year-earlier level.

Expansion of Prediction Markets Network

Robinhood's expansion of its prediction markets network is a significant development in the space. The company's prediction markets business has been growing rapidly, with the company's recent partnership with Rothera, an independently managed exchange venture with Susquehanna International Group, marking a major milestone in its expansion.

The addition of Crypto.com's OG platform to Robinhood's app will further enhance the company's prediction markets offerings, providing users with a wider range of contracts and better pricing. This move is expected to attract more users to the platform, including both retail and institutional traders.

Regulatory Environment and Future Developments

The regulatory environment for prediction markets is still evolving, with regulators continuing to grapple with the implications of these types of markets. However, the growth of prediction markets is expected to continue, with companies like Robinhood and Crypto.com at the forefront of this development.

As the prediction markets space continues to evolve, it will be interesting to see how companies like Robinhood and Crypto.com adapt to changing regulatory environments and user demands. The partnership between Robinhood and Crypto.com is a significant development in this space, and it will be worth watching to see how it unfolds.

Market Reaction and Future Outlook

Market reaction to the partnership between Robinhood and Crypto.com has been positive, with Morgan Stanley upgrading Robinhood to Overweight and raising its price target to $150, citing prediction-market engagement among its growth drivers.

As the prediction markets space continues to grow, it will be interesting to see how companies like Robinhood and Crypto.com continue to innovate and adapt to changing user demands and regulatory environments. The partnership between Robinhood and Crypto.com is a significant development in this space, and it will be worth watching to see how it unfolds.

With the growth of prediction markets, it is likely that we will see more companies entering this space, looking to capitalize on the growing demand for these types of markets. As the regulatory environment continues to evolve, it will be interesting to see how companies adapt to these changes and how the prediction markets space continues to grow and develop.

  • Robinhood will add contracts from Crypto.com's prediction-markets platform, OG, to its app.
  • Robinhood will take minority stakes in both Crypto.com and OG.
  • The partnership is expected to allow Robinhood to offer better pricing and a wider range of contracts.
  • OG has grown about 20-fold this year, according to Crypto.com CEO Kris Marszalek.
  • Robinhood customers traded 6.1 billion event contracts in July, roughly 20 times the year-earlier level.