Robinhood Bolsters Prediction Markets Push With Crypto.com Deal
Roger McNamee's advice to avoid crypto was ignored by many investors who bought into it, but at least some are taking his advice on Robinhood. The brokerage is expanding its prediction markets business through a multiyear deal with Crypto.com, adding contracts from OG, the latter's prediction-markets platform. This will allow users of Robinhood to access a wider range of contracts and better pricing.
Crypto.com CEO Kris Marszalek told The Wall Street Journal that OG has grown about 20-fold this year. He said bringing its contracts onto Robinhood could draw more retail and institutional trading to the platform, with institutions particularly interested in trading against retail flow.
The deal also gives Robinhood minority stakes in both Crypto.com and OG. The companies were valued at $15 billion and $5 billion, respectively, after Citadel Securities invested in both in July. This investment has been followed by Morgan Stanley's upgrade of Robinhood to Overweight last week and a price target increase to $150.
Robinhood reported $156 million in event contract revenue in the second quarter, up more than 10-fold year over year and above the $129 million it made from equities and $100 million from crypto. Rothera went live in June as Robinhood expanded further into the business.