Robinhood’s Prediction Bets Surge as Crypto Trading Rebounds

Robinhood Markets Inc. recorded a sharp acceleration in activity across its newest speculative products in August, with billions of prediction market wagers and a sequential rebound in cryptocurrency transactions, according to monthly operating data released Thursday by the Menlo Park, California-based brokerage.

Event contracts generated 4.7 billion transactions during the month. The contracts let users take binary yes-or-no positions on outcomes including macroeconomic data releases, Federal Reserve interest rate decisions, and athletic events.

Although prediction-market volume fell 23% from the record level reached in July, the August figure was approximately fifteen times higher than the 300 million contracts traded in August 2025. The vertical became Robinhood’s fastest-growing business line after event contract revenue increased more than tenfold year over year to $156 million in the second quarter, surpassing cryptocurrency trading as a primary source of transaction-based revenue.

Robinhood offers the contracts through designated contract markets Kalshi and Interactive Brokers’ ForecastEx, along with Rothera, a dedicated joint venture launched earlier this year. Rothera has processed more than 3.5 billion contracts since beginning operations in June.

Under the product structure, contracts trade at prices ranging from zero to one dollar according to implied probability. They pay $1.00 when an event’s occurrence is verified and expire worthless when the outcome is not met.

The rise of prediction markets on retail trading apps has prompted heightened scrutiny in Washington. Lawmakers have introduced more than 10 bills since January seeking tighter boundaries for event-based derivatives. The PREDICT Act is among the proposals; it would bar members of Congress, the president, the vice president, and executive branch officials from trading contracts tied to political, electoral, or legislative outcomes.

Consumer advocacy groups and regulatory bodies have also questioned whether placing speculative wagering products alongside standard brokerage and retirement accounts creates market integrity risks and blurs the statutory line between financial investing and gambling.

Robinhood’s total notional cryptocurrency volume reached $17.5 billion in August, a 61% rebound from the $10.9 billion recorded in July. It was still 38% below the $28.1 billion processed in August of the prior year, while cryptocurrency trading across both platforms averaged $565 million per day.

Bitstamp, the long-standing European cryptocurrency exchange acquired by Robinhood in 2025 to broaden its global licensing footprint and order-routing capabilities, contributed $10.1 billion of the August total, up 53% from July. The core Robinhood mobile application handled $7.4 billion in crypto volume, a 72% month-over-month increase but a 46% decline from the same period a year earlier. Institutional and international volumes therefore outpaced activity on Robinhood’s domestic retail application.

The company is also expanding its decentralized infrastructure. Robinhood Chain, its proprietary Ethereum Layer 2 rollup intended to reduce transaction fees and increase throughput for decentralized applications, recorded $1.6 billion in daily volume across decentralized exchanges as of Sept. 1, up 61% over a four-day period.

Broader brokerage metrics continued to show expansion. Platform assets under custody reached $384 billion at the end of August, 26% above the prior year, while funded accounts rose to 28.6 million customers. Robinhood defines funded accounts as unique users who completed at least one transaction during the preceding 45 days.

Margin balances also grew: outstanding loans to customers trading on margin increased 72% year over year to $21.5 billion. Shares of Robinhood Markets (HOOD) declined 0.83% during Thursday’s trading session after the metrics were released.

Earlier in the week, equity research analysts at Mizuho Securities and StoneX raised their price targets on the stock, citing platform asset accumulation, margin loan expansion, and product diversification. Robinhood is scheduled to release its third-quarter financial results on Nov. 4.