Robinhood is making a significant strategic push into regulated derivatives and prediction markets, leveraging its expansive retail customer base amid a competitive landscape.
The financial trading platform announced a joint venture with Susquehanna International Group and the acquisition of MIAXdx, a platform regulated by the U.S. Commodity Futures Trading Commission (CFTC). This two-pronged approach aims to meet rising investor demand and challenge competitors like Coinbase and Polymarket.
Robinhood’s prediction markets have already become its fastest-growing revenue product line. Over one million customers have traded nine billion contracts since their launch a year ago.
The new joint venture, majority-controlled by Robinhood, will establish a futures and derivatives exchange along with a clearinghouse. These entities will focus on products such as prediction markets.
The acquisition of MIAXdx, a CFTC-regulated derivatives clearing organization and exchange, is expected to accelerate the launch of operations, with a target of 2026. Miami International Holdings, which currently owns MIAXdx, will retain a 10% stake in the new exchange. Susquehanna will serve as the initial liquidity provider.
JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood, highlighted strong customer interest. “Robinhood is seeing strong customer demand for prediction markets, and we are excited to build on that momentum,” Mackenzie stated. “Our investment in infrastructure will position us to offer an even better experience and more innovative products.”
In the third quarter of 2025, Robinhood’s prediction markets processed 2.3 billion contracts. Volume in October reached $2.5 billion, accounting for 57% of the activity on Kalshi, its current prediction market partner.
Robinhood’s partnership with Kalshi began in March 2025, integrating a prediction markets hub into its app for topics like politics, economics, and sports. The platform added NFL and college football markets in August.
Analysts at Bernstein noted Robinhood’s significant “distribution advantage.” They estimate the company already captures more than 50% of Kalshi’s volume, attributing this to its 14 million active traders who align demographically with these products.
Bernstein projects an annual run rate exceeding $300 million for Robinhood’s prediction markets. Gautam Chhugani, a Bernstein analyst, said, “We want to leverage their distribution advantage to claim a larger share of the market revenue pool.”
Bernstein maintains an “outperform” rating for Robinhood, with a price target of $160, suggesting a 38% upside from its current share price of $115.57.
The competitive landscape for prediction markets is intensifying. Coinbase plans to unveil its own platform on December 17 during its “System Update” event.
Globally dominant Polymarket, while not yet fully established in the U.S., has secured an amended CFTC designation and is seeking re-entry into the U.S. market through partnerships.
Bernstein analysts identify a structural division in the market, with liquidity platforms like Kalshi and Polymarket on one side, and distribution channels like retail brokers and crypto exchanges, where Robinhood is a key player, on the other.
The new exchange will not only serve Robinhood Derivatives but also other Futures Commission Merchants (FCMs). This expansion aims to provide consumers with more options and greater flexibility in developing contracts and services.
This initiative marks a crucial step in Robinhood’s evolution beyond traditional stock and cryptocurrency offerings. It underscores the growing influence of retail demand in driving financial innovation within the CFTC-regulated prediction market ecosystem.