Robinhood Invests in Prediction Market Infrastructure
Robinhood is deepening its involvement in the operational backbone of its burgeoning prediction markets business. The trading app announced Tuesday that it will acquire minority equity stakes in both Crypto.com and OG.com, the prediction markets platform that Crypto.com initially launched as a standalone application in February and has since spun off into its own independently capitalized entity.
Prediction markets allow individuals to trade contracts based on the likelihood of future events—such as a Federal Reserve interest rate adjustment, election outcomes, or the winner of a sporting event—offering an alternative to traditional sports betting. While Polymarket stands as a prominent player in this space, other platforms like Kalshi and Myriad, developed by Dastan, the parent company of Decrypt, also operate in the market.
Robinhood has identified this concept as its most rapidly expanding product category, and the current deal centers on the underlying infrastructure that powers these markets.
Under the terms of the agreement, OG.com will serve as an infrastructure and clearing provider for Robinhood. This means OG.com will be responsible for processing and settling trades once a customer places a wager.
Robinhood will direct its retail trading volume through OG.com’s exchange, which is regulated by the Commodity Futures Trading Commission (CFTC), the federal agency overseeing this class of contracts. The companies have characterized this as OG.com’s largest business-to-business partnership in terms of trading volume. The phased rollout to eligible U.S. customers is scheduled to commence on September 8.
The equity investments are structured in the opposite direction. Robinhood’s stakes in Crypto.com and OG.com are valued in line with Citadel Securities’ July investment, which marked Crypto.com’s inaugural institutional funding round and valued the exchange at $20 billion. OG.com’s independent spin-off values the company at $5 billion.
Kris Marszalek, founder and CEO of Crypto.com, described the partnership as a “game changer,” stating in a release that his ambition is for OG.com to become “the most liquid venue globally for innovative derivative instruments.”
Robinhood VP JB Mackenzie commented that the deal “gives [Robinhood] even more skin in the game” as customer demand for event contracts continues to surge.
Robinhood initially built its prediction markets hub utilizing contracts from Kalshi. Subsequently, the company began migrating volume to Rothera, its own CFTC-licensed exchange operated as a joint venture with the trading firm Susquehanna International Group, which was tested during this year’s World Cup. The addition of OG.com provides Robinhood with a third infrastructure supplier, diversifying its reliance from a single provider.
This strategic shift appears to be yielding significant results. Robinhood’s revenue from event contracts experienced a more than tenfold increase year-over-year, reaching $156 million in the second quarter. This surge has positioned prediction markets as the company’s fastest-growing business segment, contrasting with a 38% decline in crypto trading revenue. For an application that initially built its reputation on stock and cryptocurrency trading, event contracts are now contributing substantially to its overall performance.
Concurrently, Crypto.com secured conditional approval for a U.S. national trust bank charter in February. The spin-off of OG.com into a separate entity represents another step in its evolution towards becoming regulated financial infrastructure, moving beyond its identity as solely a crypto application.
The market reacted positively to the news. Shares of Robinhood, trading under the ticker HOOD, rose approximately 3.4% in premarket trading Tuesday, reaching around $126. CRO, Crypto.com’s native token, saw a jump of over 6%, trading at $0.06 with a daily high of $0.065. This marks a notable rebound for the token, which had fallen to a three-year low just a month prior following the cancellation of separate deals with Crypto.com by Trump Media Group.
The phased rollout to eligible U.S. customers begins today. Both companies have indicated that their next objective is the introduction of equity-linked perpetual futures, pending regulatory approval.
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