Robinhood is quietly undergoing a major change in what actually makes money on its platform.
The broker generated $156 million from prediction-market event contracts in the second quarter, more than the $129 million earned from equity trading and the $100 million generated by cryptocurrency transactions, according to Robinhood’s latest financial results.
That confirms a widely shared observation from StockMKTNewz this weekend that Robinhood now earns more from customers trading predictions than from customers trading stocks.
More importantly for investors, Wall Street is beginning to treat the shift as something more durable than a temporary speculative boom.
Event Contracts Jump More Than 10-Fold
Robinhood users traded 13.6 billion event contracts during Q2, up more than tenfold from 1 billion a year earlier. Prediction-market revenue jumped from only $10 million to $156 million over the same period.
The category is now Robinhood’s second-largest transaction revenue stream behind options, which produced $342 million during the quarter.
The momentum continued after quarter-end. July brought another 6.1 billion event contracts, roughly 20 times the year-earlier level. In contrast, Robinhood’s crypto trading volume fell 62% year over year to $10.9 billion.
That divergence suggests speculative retail activity may not simply be disappearing when crypto slows, it may be migrating into prediction markets.
We previously tracked the same transition when prediction markets were expected to overtake crypto and when Robinhood’s record Q2 revealed the scale of event-contract growth.
Rothera Could Make the Economics Even Better
Robinhood is also reducing its dependence on outside prediction-market infrastructure.
The company launched Rothera, a CFTC-licensed exchange and clearinghouse created through a joint venture with Susquehanna International Group, in June. Rothera processed 2.1 billion contracts during Q2 and already contributed $17 million of Robinhood’s $156 million event-contract revenue.
Robinhood still distributes contracts from other venues, but owning part of the underlying exchange potentially gives it more economics than simply acting as the customer-facing broker.
That is increasingly attracting Wall Street attention.
Morgan Stanley analyst Michael Cyprys upgraded HOOD to Overweight this week and increased his price target from $124 to $150, arguing that Robinhood’s expanding businesses are raising engagement and monetization beyond crypto trading.
HOOD surged 16.6% on Thursday to $124.72 before giving back about 2.1% Friday.
The regulatory question has not disappeared. Coinpaper’s coverage of the evolving CFTC framework shows why sports and political contracts remain closely watched.
But Robinhood’s numbers now make one thing difficult to ignore: prediction markets have moved from an experimental feature to one of the broker’s largest revenue businesses—and faster than Wall Street originally expected.