Prediction markets out-earn crypto at Robinhood: $173 million against $120 million

Prediction markets brought in more revenue than cryptocurrency trading at Robinhood in the third quarter: $173 million from event contracts against $120 million from crypto, according to the company's quarterly results.

What happened

Robinhood Markets reported on Tuesday, October 27, that event contracts revenue was $173 million, up more than six times from a year earlier, while cryptocurrencies revenue was $120 million, down 55%. Both lines sit inside transaction-based revenues, which rose 19% from a year earlier to $867 million.

The crypto decline followed lower trading volumes. Crypto notional trading volume fell 38% from a year earlier to $50 billion, the company said. The Robinhood app accounted for $21 billion, down 48%, and Bitstamp for $29 billion, down 28%.

Event contracts, the instruments traded in Robinhood's prediction markets hub, moved the other way. Contracts traded rose more than sevenfold from a year earlier to a record 16.4 billion. The company defines each contract as tradable in $0.01 increments up to $1 and worth $1 at settlement.

Event contracts revenue was about 20.0% of transaction-based revenues, and crypto about 13.8% (both computed from the reported figures). The difference between the two lines was $53 million (computed).

Total net revenues rose 12% from a year earlier to $1.42 billion. Net income fell 14% to $476 million, and diluted earnings per share fell 16% to $0.51. Robinhood said net income included $67 million of unrealized losses, mainly from marking its Robinhood Ventures Fund I to market.

Why it matters

Lower crypto prices also weighed on what customers hold. Total platform assets rose 19% from a year earlier to $396 billion, which Robinhood attributed to net deposits and higher equity valuations, "partially offset by lower cryptocurrency valuations."

Robinhood also reported activity on the blockchain side of its business. It said Robinhood Chain generated "over $80 billion in DEX volume and over $50 million of chain fees" in its first quarter on Mainnet. The release gives no figure for what share of that volume or those fees Robinhood itself earned, and it does not include a comparison with an earlier period.

On the customer side, funded customers rose 7% from a year earlier to 28.7 million, and Gold subscribers rose 34% to a record 5.2 million. Net deposits were $15.7 billion in the quarter.

The release does not say why customers traded less crypto or more event contracts, and this article does not draw that conclusion.

What to watch

Robinhood said it launched crypto trading in the UK and received authorization from the Dubai Financial Services Authority covering trading and custody across all ten asset classes the regulator has approved, including crypto. It plans to begin rolling out its products in the area in 2027.

The chief financial officer, Shiv Verma, said October net deposits had already topped $13 billion month-to-date, including $6 billion from the Dell family's contribution to Trump Accounts.