Robinhood’s expanding crypto bet meets a faster-moving prediction market boom

Robinhood is pushing deeper into crypto infrastructure with the launch of its personal blockchain community, tokenized shares and decentralized lending merchandise, at the same time as one in every of its fastest-growing income alternatives could also be forming outdoors crypto.

On July 1, the brokerage launched the general public mainnet for Robinhood Chain at a London occasion, marking its most direct transfer but into onchain monetary infrastructure.

The Ethereum layer-2 community, constructed on Arbitrum, is designed to assist tokenized real-world property, decentralized finance purposes and buying and selling exercise tied to Robinhood’s increasing world product suite.

The launch offers Robinhood extra management over the infrastructure behind its tokenized-stock ambitions. Inventory Tokens can be found by means of Robinhood Pockets in additional than 120 nations, although entry varies by jurisdiction and the merchandise are unavailable to US individuals.

Robinhood’s disclosures state that the tokens are debt securities that present financial publicity to underlying shares, relatively than authorized or helpful rights in these shares. The corporate stated eligible customers will have the ability to commerce the tokens across the clock and use them throughout decentralized finance purposes, together with lending swimming pools and collateral for buying and selling.

Robinhood additionally launched Robinhood Earn, a decentralized lending product that enables eligible US customers to lend USDG, its dollar-backed stablecoin, by means of a self-custody pockets.

The product affords an estimated 7% annual proportion yield and makes use of lending infrastructure powered by Morpho, with insurance coverage procured by means of Lloyd’s of London and RELM for lined losses tied to cyber or sensible contract exploits.

The crypto rollout got here alongside a broader slate of growth. The corporate revealed plans to launch crypto buying and selling within the UK, to make its companies accessible in Canada following its acquisition of WonderFi, and to have acquired a capital markets companies license in Singapore.

These bulletins present how Robinhood is making an attempt to show a retail brokerage into a worldwide buying and selling venue spanning shares, crypto, tokenized property, derivatives, decentralized finance and synthetic intelligence instruments.

But the corporate’s subsequent main income shock might come from occasion contracts, the prediction-market merchandise that enable customers to commerce on outcomes in politics, sports activities, economics and different occasions.

A crypto launch lands as occasion contracts speed up

Robinhood’s blockchain push offers the corporate a clearer basis for its tokenized asset technique at a time when prediction markets are starting to problem crypto buying and selling as a supply of transaction income.

Artemis analyst Crossroads suggests Robinhood’s prediction-market income may exceed its crypto income as early because the second quarter.

The report cited about 12.3 billion occasion contracts traded by means of June 25. At an assumed take charge of 1 cent per contract, that might indicate roughly $123 million in quarterly income earlier than the ultimate days of June are included.

That determine would put prediction markets inside attain of Robinhood’s first-quarter crypto transaction income, when the corporate reported $134 million.

Whereas crypto volumes confirmed some enchancment in June, they remained beneath strain in contrast with earlier durations, with institutional exercise carrying decrease take charges than retail buying and selling.

The comparability just isn’t ultimate till Robinhood studies second-quarter earnings. However the estimates level to a shift in how traders might have to view the corporate.

Certainly, Robinhood has lengthy been handled partly as a retail crypto proxy as a result of buying and selling booms in Bitcoin, Dogecoin, and different digital property have flowed into its outcomes. A bigger contribution from occasion contracts would make that relationship much less direct.

Prediction markets have additionally grown regardless of authorized and regulatory challenges. Robinhood has provided occasion contracts by means of its partnership with Kalshi, one of many main US platforms within the class.

Chief Government Officer Vlad Tenev has described the corporate as close to the start of a prediction-market cycle, and Robinhood executives have pointed to a $500 million annual income run charge.

Sports activities markets, together with World Cup-related exercise, have helped the current surge. That creates a transparent sturdiness take a look at. Volumes tied to a serious world occasion can fade after the match ends.

Nonetheless, Artemis argued that Kalshi’s progress outdoors sports activities and Robinhood’s distribution give the enterprise a path past one occasion cycle.

Robinhood is shifting from distribution into infrastructure

The extra essential growth for Robinhood could also be its try and personal extra of the plumbing behind its merchandise.

That shift is seen in crypto by means of Robinhood Chain. The community is constructed to supply builders with a platform for tokenized property and decentralized finance instruments, with integrations from companies together with Alchemy, BitGo and Chainlink.

Uniswap can be deploying a devoted automated market maker on the chain, whereas Pleiades is deploying a proprietary automated market maker to function a buying and selling venue.

The identical infrastructure logic is rising in prediction markets by means of Rothera, the platform tied to Robinhood and Susquehanna. Rothera continues to be small in contrast with Kalshi and Polymarket, and its long-term monetization has not been established.

Nevertheless, the platform has generated greater than $900 million in quantity over a current one-week interval, giving Robinhood a clearer path to function extra straight available in the market relatively than relying completely on third-party venues.

That distinction may turn out to be essential if Robinhood begins routing extra of its personal app-based event-contract exercise by means of Rothera. A brokerage that controls the buyer interface and extra of the underlying market infrastructure can seize extra of the economics, set pricing extra aggressively, and use liquidity from one aspect of the enterprise to strengthen the opposite.

The technique resembles the broader strategy behind Robinhood Chain. In each instances, Robinhood is making an attempt to maneuver past merely providing entry to outdoors markets. It’s constructing or aligning with infrastructure that may sit beneath the buying and selling exercise itself.

That doesn’t take away the dangers. Rothera presently lacks the dimensions of the most important prediction-market platforms. Its current quantity could also be partly tied to short-term demand in sports activities.

Robinhood’s economics may additionally differ relying on whether or not trades proceed to move by means of Kalshi, transfer to Rothera, or use a mixture of each venues.

Furthermore, the regulatory path for prediction markets stays unsettled, particularly if the class continues to increase past slim monetary and sports activities contracts.

Perpetual futures widen the buying and selling menu

Robinhood’s derivatives growth in Europe exhibits that the corporate can be constructing a extra typical buying and selling enterprise round superior merchandise.

The brokerage stated commodity, ETF and international trade perpetual futures are being rolled out to eligible European customers, including property akin to gold, silver, QQQ, EUR/USD, WTI, Brent crude and EWY. The merchandise enable as much as 10x leverage and buying and selling across the clock.

Robinhood additionally stated Bitstamp by Robinhood launched multi-asset perpetual futures, giving institutional market individuals entry to FX, fairness indices, commodities and crypto from a single pool of capital.

The providing makes use of a US dollar-settled account with unified collateral administration, reference costs from Kaiko Benchmark Indices and matching know-how powered by Nasdaq. Bitstamp by Robinhood operates as a MiFID II-authorized multilateral buying and selling facility in Europe.

The growth offers Robinhood extra methods to compete with crypto-native exchanges, conventional brokerages and derivatives venues. It additionally exhibits how the corporate is making use of crypto-style buying and selling mechanics, together with perpetual futures and 24-hour market entry, to conventional asset lessons.

That technique may make Robinhood much less depending on any single cycle. Crypto buying and selling income has traditionally been risky, rising sharply throughout retail-led rallies and falling when token costs and volumes weaken.

Perpetual futures, prediction markets, tokenized shares, and lending merchandise may present the corporate with further income streams with distinct demand drivers.

AI instruments push the platform nearer to automated buying and selling

Robinhood can be getting ready to deliver extra automation into crypto buying and selling by means of Agentic Accounts for eligible US customers.

The software will enable customers to attach AI fashions to Robinhood’s buying and selling infrastructure by means of its Buying and selling MCP. The corporate stated customers will retain management over the quantity of capital allotted and the protection limits utilized to the technique, whereas AI brokers can scan information and execute trades inside these parameters.

Robinhood has already launched agentic buying and selling for equities and choices within the US. Extending the software to crypto provides one other layer to its plan to mix retail entry, automation and multi-asset buying and selling inside a single platform.

The corporate framed the product as a option to give retail merchants entry to capabilities extra generally utilized by skilled companies.

Nevertheless, the dangers are additionally clear. Automated buying and selling instruments can enlarge poor technique design, weak threat controls and sudden market strikes, significantly in crypto markets the place liquidity and volatility can shift shortly.

The AI launch suits with Robinhood’s wider effort to make the platform extra energetic, extra world and extra embedded in customers’ monetary lives. The identical occasion included a Guinness World Information demonstration through which an AI agent used a Robinhood-branded bank card to buy objects for attendees.

For traders, the take a look at is whether or not these merchandise can create sturdy income relatively than periodic bursts tied to market cycles, product launches, or main occasions.