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 certainly one of its fastest-growing income alternatives could also be forming exterior 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 functions and buying and selling exercise tied to Robinhood’s expanding international product suite.
The launch offers Robinhood extra management over the infrastructure behind its tokenized inventory ambitions. Stock Tokens at the moment are obtainable via Robinhood Wallet in additional than 120 nations, although entry varies by jurisdiction.
The firm mentioned eligible customers will be capable to commerce tokenized equities across the clock and use them throughout decentralized finance functions, together with lending swimming pools and collateral for buying and selling.
Robinhood additionally launched Robinhood Earn, a decentralized lending product that permits eligible US customers to lend USDG, its dollar-backed stablecoin, via 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 via Lloyd’s of London and RELM for coated losses tied to cyber or good contract exploits.
The crypto rollout got here alongside a broader slate of growth. The firm revealed plans to launch crypto buying and selling within the UK, to make its companies obtainable 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 international buying and selling venue spanning shares, crypto, tokenized property, derivatives, decentralized finance and synthetic intelligence instruments.
Yet the corporate’s subsequent main income shock could come from occasion contracts, the prediction-market merchandise that permit 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 might exceed its crypto income as early because the second quarter.
The report cited about 12.3 billion occasion contracts traded via June 25. At a typical take fee of 1 cent per contract, that may indicate at the very least $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 revenue, when the corporate reported $134 million.
While crypto volumes confirmed some enchancment in June, they remained below stress in contrast with earlier durations, with institutional exercise carrying decrease take charges than retail buying and selling.
The comparability shouldn’t be closing till Robinhood experiences second-quarter earnings. But the estimates level to a shift in how buyers could have to view the corporate.
Indeed, 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 via its partnership with Kalshi, one of many main US platforms within the class.
Chief Executive 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 fee.
Sports markets, together with World Cup-related activity, have helped the latest surge. That creates a clear sturdiness check. Volumes tied to a main international occasion can fade after the match ends.
Still, Artemis argued that Kalshi’s progress exterior sports activities and Robinhood’s distribution give the enterprise a path past one occasion cycle.
Robinhood is shifting from distribution into infrastructure
The extra necessary growth for Robinhood could also be its try and personal extra of the plumbing behind its merchandise.
That shift is seen in crypto via 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 similar infrastructure logic is rising in prediction markets via Rothera, the platform tied to Robinhood and Susquehanna. Rothera remains to be small in contrast with Kalshi and Polymarket, and its long-term monetization has not been established.
However, the platform has generated greater than $900 million in quantity over a latest one-week interval, giving Robinhood a potential path to function extra immediately within the market reasonably than relying completely on third-party venues.
That distinction might turn into necessary if Robinhood begins routing extra of its personal app-based event-contract exercise via 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 facet of the enterprise to strengthen the opposite.
The technique resembles the broader strategy behind Robinhood Chain. In each circumstances, Robinhood is making an attempt to maneuver past merely providing entry to exterior markets. It is 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 largest prediction-market platforms. Its latest quantity could also be partly tied to momentary demand in sports activities.
Robinhood’s economics might additionally range relying on whether or not trades proceed to stream via Kalshi, transfer to Rothera, or use a mixture of each venues.
Moreover, 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 standard buying and selling enterprise round superior merchandise.
The brokerage mentioned commodity, ETF and overseas alternate perpetual futures are being rolled out to eligible European customers, including property reminiscent of gold, silver, QQQ, EUR/USD, WTI, Brent crude and EWY. The merchandise permit as much as 10x leverage and buying and selling across the clock.
Robinhood additionally mentioned Bitstamp by Robinhood launched multi-asset perpetual futures, giving institutional market members 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 expertise 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 might 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 might present the corporate with extra 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 via Agentic Accounts for eligible US customers.
The device will permit customers to attach AI models to Robinhood’s buying and selling infrastructure via its Trading MCP. The firm mentioned customers will retain management over the quantity of capital allotted and the protection limits utilized to the technique, whereas AI brokers can scan knowledge and execute trades inside these parameters.
Robinhood has already launched agentic buying and selling for equities and choices within the US. Extending the device 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 firm framed the product as a method to give retail merchants entry to capabilities extra generally utilized by skilled companies.
However, the dangers are additionally clear. Automated trading tools can enlarge poor technique design, weak threat controls and sudden market strikes, significantly in crypto markets the place liquidity and volatility can shift rapidly.
The AI launch matches with Robinhood’s wider effort to make the platform extra energetic, extra international and extra embedded in customers’ monetary lives. The similar occasion included a Guinness World Records demonstration wherein an AI agent used a Robinhood-branded bank card to buy objects for attendees.
For buyers, the check is whether or not these merchandise can create sturdy income reasonably than periodic bursts tied to market cycles, product launches, or main occasions.
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