Robinhood says price contracts tied to bitcoin, gold and oil are among its fastest-growing prediction market products. Sports remains the largest category, but traders are shifting toward financial events and ever-shorter crypto contracts.
Robinhood is seeing growing demand for prediction markets tied to bitcoin, gold and oil, as traders look beyond sports and elections to bet on moves in financial markets.
JB Mackenzie, VP and GM for futures and prediction markets at Robinhood, said at the NEXTPredict conference in New York on Thursday that sports is still the largest product on the platform. However, he said the way people use it is shifting.
Crypto contracts shrink to 15 minutes
Prediction markets let traders buy contracts on whether an event will happen, with prices reflecting the market's implied probability. A bitcoin contract might ask whether the price will sit above a set level at a set time, so traders can take a position without buying the cryptocurrency.
Mackenzie said Robinhood's largest event contract in September was not tied to sports but to the Federal Reserve's interest rate decision. Traders are also moving to shorter contracts, and some crypto products now settle in as little as 15 minutes.
Asked about the risks, Mackenzie compared 15-minute crypto contracts to zero-day options, which expire on the same trading day. Both can produce rapid losses, though their structures differ.
Legal pressure on sports contracts
Robinhood entered the business through a partnership with Kalshi, a federally regulated prediction market exchange. The expansion comes as sports contracts face legal challenges from state gambling regulators, raising questions about how much of that market will remain available. Financial contracts could offer another source of growth.
A route into other Robinhood products
Prediction markets also bring customers into the rest of the platform. Mackenzie said users who arrive to trade event contracts often begin exploring stocks, cryptocurrencies, futures and options, and some discover the company's retirement accounts. According to Mackenzie: "almost immediately start to build out into equities, crypto, futures, options."
Robinhood has 11 businesses generating more than $100 million in annual revenue each, Mackenzie said, and prediction markets could be the fastest-growing segment among them.
Source: CoinDesk
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