The Rapid Growth of Robinhood's Prediction Market

Robinhood CEO Vlad Tenev Emphasizes the Importance of the Prediction Market

Robinhood (HOOD) CEO Vlad Tenev announced on Thursday during an investment event that the company has launched its biggest product of the year related to its entry into the prediction market. This product is highlighted as the fastest-growing product in the company’s history.

Tenev noted during last week’s earnings call that the prediction market is on track to generate $300 million in revenue annually based on its performance in October. This figure has doubled compared to the previous quarter.

Tenev stated, "Additionally, in October, we announced that we processed about 2.5 billion contracts, which is more than all the contracts made during the entire third quarter. Therefore, this area is growing at an extremely rapid pace."

Launched in March, Robinhood’s prediction market allows users to buy and sell event contracts related to sports events, elections, and more. This market could be highly profitable for Robinhood, as approximately two-thirds of its users also utilize mobile sports betting platforms like FanDuel and DraftKings (DKNG). This information was obtained from a Mizuho survey related to the year 2025.

Event contracts are regulated by the Commodity Futures Trading Commission (CFTC) and allow companies like Robinhood, as well as sports betting companies like DraftKings and FanDuel, to operate in legal gray areas.

Additionally, Robinhood is benefiting from the explosion in the cryptocurrency market this year. Tenev indicated that the company’s institutional cryptocurrency exchange platform Bitstamp has surpassed an annual growth of $100 million.

On Thursday, while technology stocks fell and cryptocurrency prices declined, Robinhood's shares lost more than 9% of their value. Robinhood shares, which were added to the S&P 500 index in September, have increased by more than 220% this year.

The company is pursuing an aggressive strategy to expand its product range, including introducing a new service called Robinhood Banking alongside its core trading capabilities. This banking product aims to recreate the exclusive banking experience offered to high-income clients by large financial institutions.

As part of this service, Robinhood announced it would deliver cash directly to customers’ doors. Tenev stated, "When we start thinking about the features and services that high-income individuals will receive, an important aspect is that they are not going to ATMs in the city." He added, "They are receiving cash delivered to their homes." "And surprisingly, even in an increasingly digital world, cash still plays a very important role in the U.S. economy, and people occasionally need it."