Key facts
- Robinhood is partnering with Crypto.com to integrate prediction markets onto its platform.
- Robinhood will take minority equity stakes in Crypto.com and its prediction market business, OG.com.
- OG.com will serve as an infrastructure and clearing provider for Robinhood's prediction markets.
- The deal is expected to boost Robinhood's rapidly growing event contract revenue.
- Robinhood's stock (HOOD) saw a notable increase following the announcement.
Robinhood is deepening its involvement in prediction markets through a strategic partnership with Crypto.com, which includes taking minority equity stakes in the crypto exchange and its standalone prediction market platform, OG.com. Under the multi-year agreement, OG.com will function as an infrastructure and clearing provider for Robinhood's prediction markets, processing and settling trades. This move comes as Robinhood's event contract business has seen significant growth, with revenue surging more than tenfold year-over-year to $156 million in the second quarter, making it the company's fastest-growing product line.
Crypto.com founder and CEO Kris Marszalek described the collaboration as a "game changer," aiming for OG.com to become a leading venue for innovative derivative instruments. Robinhood's investment is priced in line with a previous funding round that valued Crypto.com at $20 billion and OG.com at $5 billion. The partnership aims to leverage OG.com's CFTC-regulated exchange to handle Robinhood's retail volume, marking OG.com's largest business-to-business partnership. The rollout to eligible U.S. customers begins in phases starting September 8.
Following the announcement, Robinhood's stock (HOOD) rose approximately 3.4% in premarket trading to around $126, while Crypto.com's native token, CRO, jumped toward a weekly high near $0.063. This news follows Crypto.com's conditional approval for a U.S. national trust bank charter in February and its spin-off of OG.com into a separate entity, signaling a move towards more regulated financial infrastructure. Robinhood's strategy of diversifying its infrastructure suppliers for prediction markets, rather than relying on a single provider, appears to be paying off.