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Key Points
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Robinhood buys 90% of LedgerX with backing from SIG to expand in prediction markets.
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Bernstein says Robinhood’s move raises pressure on Kalshi, Polymarket, and Coinbase.
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Coinbase prepares its own platform for launch in December.
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Analysts expect Robinhood to leverage its 14 million traders to dominate.
Prediction markets competition is entering a new phase as Robinhood moves decisively into the sector.
The trading app, in partnership with Susquehanna International Group (SIG), has acquired a 90% stake in the derivatives exchange LedgerX from MIAX. This deal, according to analysts at Bernstein, positions Robinhood to challenge established players like Polymarket and Kalshi in one of the most promising financial technology frontiers.
The purchase also marks a key step for Robinhood’s strategy to expand beyond traditional stock trading. The firm is now using its scale to target the growing fee pool in prediction markets. Bernstein said this could help Robinhood capture more revenue per user, especially as demand for market-based forecasting tools rises among retail traders.
Robinhood’s Strategic Expansion
Robinhood’s entry into LedgerX strengthens its ability to offer CFTC-regulated products, a feature that has become essential for large-scale prediction market platforms. MIAX, the current operator of LedgerX, will retain a 10% ownership stake. MIAX CEO Thomas Gallagher said the transaction will allow faster access to the expanding prediction markets segment.
Bernstein noted that Robinhood now drives more than half of Kalshi’s trading volume, producing over $300 million in annual recurring revenue. With nine billion contracts already traded by more than one million users, Robinhood’s next step is to add its own liquidity to boost product variety and profitability.
Highlight: Robinhood aims to dominate the prediction markets competition through scale and liquidity.
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Market Reaction and Competitor Moves
Robinhood’s shares jumped 8% following the announcement, signaling strong investor confidence. The reaction also reflects expectations that Robinhood’s platform will attract more active users and new revenue streams.
Competitors are also responding. Coinbase is preparing to unveil its own prediction market product on December 17, though analysts say the company might act more as a distributor than a direct liquidity provider. Meanwhile, Polymarket, which recently received CFTC clearance to launch intermediate markets, plans to expand aggressively in U.S. partnerships.
Highlight: Coinbase and Polymarket prepare counter-moves in growing prediction markets competition.
Two-Tier Market Structure Emerging
Bernstein analysts described a shift toward a two-tier ecosystem in prediction markets. Platforms like Kalshi and Polymarket serve as liquidity venues, while brokers and exchanges such as Robinhood and Coinbase distribute contracts to large retail bases. This model mirrors how traditional financial markets balance liquidity providers and distributors.
Robinhood’s advantage lies in its vast user base. With 14 million active traders, it holds a demographic edge unmatched by other platforms. From my standpoint, this move signals a long-term ambition to control not just the trading interface but also the underlying liquidity and fee structure.
Highlight: Prediction markets competition reshapes around liquidity venues and retail distribution power.
Outlook for 2025
The next few months will likely define the leaders in this space. Bernstein believes that Robinhood’s integration of LedgerX will accelerate innovation and set the tone for future growth. Coinbase’s upcoming launch and Polymarket’s expansion will test whether new entrants can match Robinhood’s speed and scale.
Kalshi, once a niche exchange, now faces mounting pressure as major brokers enter prediction markets directly. Analysts expect the overall market volume to grow sharply as user participation broadens and regulatory clarity improves.
