Robinhood moves into prediction markets with FTX-linked acquisition

Robinhood acquires a majority stake in LedgerX for prediction markets

In a significant move, Robinhood Markets, along with Susquehanna International Group, is acquiring a 90% stake in LedgerX, a company linked to the now-defunct cryptocurrency exchange FTX. This acquisition is part of Robinhood's strategy to enter the growing prediction markets sector. The deal was announced shortly after Robinhood unveiled plans for a new futures and derivatives platform that will include options for prediction markets.

Acquisition intensifies competition in the prediction markets sector

This acquisition positions Robinhood and Susquehanna as direct competitors to existing prediction market platforms such as Kalshi and Polymarket. The interest in prediction markets has surged recently, particularly due to increased betting on U.S. elections. The market dynamics are changing rapidly, with Robinhood's entry likely to shake up the competitive landscape.

Kalshi and Polymarket are leading the prediction market landscape

Kalshi has been making waves in the prediction markets since a federal court allowed it to offer event contracts related to U.S. elections in October 2024. Following this development, Kalshi's valuation reportedly soared to $11 billion after a funding round led by major investors. Polymarket also recently received regulatory approval, enabling it to operate a U.S.-intermediated trading platform, further solidifying its position in the market.

Robinhood shares rise following announcement of the acquisition

Following the announcement of the acquisition, Robinhood's shares experienced a notable increase, climbing approximately 8% to $125.24. This market reaction underscores investor confidence in Robinhood's strategic move into prediction markets and its potential to capture a share of this growing industry.