Robinhood is experiencing growing demand for prediction markets tied to bitcoin, gold and oil, as traders broaden their focus beyond traditional sports and election betting.
Price volatility contracts for these assets are among the fastest-growing products on the platform, according to JB Mackenzie, VP and general manager for futures and prediction markets at Robinhood. While sports remains the largest product category, Mackenzie said a notable shift is underway in how traders use the platform.
"We've now started to see price volatility contracts, such as bitcoin, crude oil, gold, start to dominate the marketplace, and they're the fastest growing products that are out there," Mackenzie said at the NEXTPredict conference in New York.
Prediction markets allow traders to purchase contracts based on whether an event will occur, with prices reflecting the market's implied probability of an outcome. For instance, a contract might ask whether bitcoin will trade above a certain price at a specific time, enabling traders to take a position without purchasing the cryptocurrency directly.
Economic Events Driving Growth
The market has evolved from its origins in elections to encompass sports, economic data and short-term price movements. Robinhood entered the prediction market business through a partnership with Kalshi, a federally regulated prediction market exchange.
Mackenzie noted that Robinhood's largest event contract in September was tied to the Federal Reserve's interest rate decision rather than sports, indicating growing interest in economic events.
Shortening Settlement Periods
Traders are increasingly moving toward shorter-duration contracts, particularly in cryptocurrency. Some crypto prediction products now settle in as little as 15 minutes, down from weekly and daily timeframes.
"It started off with a week. It's moved to a day, and now we're down to 15 [minutes]," Mackenzie said. He compared 15-minute crypto contracts to zero-day options, which expire the same trading day, noting both can produce rapid losses despite differing structures.
Gateway to Other Products
Prediction markets are also serving as an entry point for Robinhood's other businesses. Mackenzie said users who arrive to trade event contracts often begin exploring stocks, cryptocurrencies, futures, options and individual retirement accounts on the platform.
Robinhood has 11 businesses generating more than $100 million in annual revenue each. Mackenzie indicated that prediction markets could potentially become the company's fastest-growing segment among them.
