In recent years, the cryptocurrency market has been heavily influenced by politics and news, and investors have gradually realized that speculative models that simply bet on price fluctuations are significantly affected by the marginal benefits of various geopolitical and economic policies. Against this backdrop, prediction markets have rapidly emerged as a new favorite among investors. Robinhood (Hood)'s entry into the prediction market arena has resulted in record-high stock prices and earnings, signifying the strong acceptance of prediction markets by retail stock platforms popular with retail investors. This shift in investor focus may also have a structural impact on the cryptocurrency sector.
Unlike most crypto assets that rely on liquidity and risk appetite, prediction markets are essentially betting on the "probability of future events," encompassing sporting events, political events, economic data, and even any trending news. For retail investors, the instantaneous nature of the game is, in some ways, more attractive than simply holding crypto tokens. When platforms like Robinhood, with their massive retail user base, incorporate prediction markets into their core product lines, it will inevitably divert some speculative funds that would otherwise flow into cryptocurrencies, Altcoin, or even perpetual contracts.
In its recent keynote address, Robinhood unveiled its new prediction market product, Parlays, aiming to capture market share from traditional sports betting and its competitors. Robinhood's latest move is more than just product expansion; it may represent a deeper trend shift. In an environment of limited funds, prediction markets could become a new battleground for cryptocurrency speculators, and Robinhood is attempting to seize key market share in this transition. This article is excerpted from an analysis report by The Blockworks and the author's further reflections.
Sports events drive rapid growth in the prediction market
Sports events are a clear driver of market growth. Currently, sports events account for approximately 35% of trading volume on Polymarket and nearly 90% on Kalshi. Annualizing the sports event trading volume on both platforms over the past four weeks, the total is approximately $74.5 billion. For reference, FanDuel's betting volume in 2024 was approximately $50.7 billion, and DraftKings' was approximately $49.4 billion.
Robinhood enters Parlays for parlay betting
Prediction markets appear to be making significant strides daily. Robinhood recently announced a new prediction market feature in its keynote address, and prediction markets have become Robinhood's fastest-growing revenue product, with over 1 million users trading 11 billion contracts. Currently, the only missing product in prediction markets is parlays, which Robinhood is actively expanding into. Parlays account for approximately 30% of sports betting volume and nearly 60% of industry revenue.
What are Parlays ( or parlay betting) ?
Parlay = Combination betting on multiple results
Instead of betting on a single event, betting on two or more outcomes simultaneously, for example:
Match A: The home team wins. Match B: The total score exceeds a certain number. Match C: A player's score exceeds a certain number.
All three conditions must be met for the bet to be considered successful.
Why are the odds for Parlays ( a type of parlay betting) relatively high?
Each additional condition decreases the chance of success and increases the risk → The platform offers higher potential returns. Single bet: high win rate, low return. Parlay bet: low win rate, high return. This "small amount for high reward" characteristic makes it very attractive to many traders and speculators.
From a platform perspective, Parlays has several features that can generate substantial revenue, for the following three reasons.
High user engagement (will design more combinations)
Platforms with longer average transaction counts and longer session times typically have higher profit margins.
In traditional sports betting, parlays account for about 30% of the trading volume but contribute nearly 60% of the platform's total revenue. This is why platforms such as Robinhood, DraftKings, and Kalshi are eager to launch or enhance the parlay feature. Parlays combine multiple bets into one, offering higher odds, but the odds of winning are very low, which is why parlays are so profitable for the platform.
Robinhood announced that users will soon be able to trade various outcomes, totals, and point spreads for single NFL games. Looking ahead to early 2026, users will be able to create custom combinations of up to 10 outcomes for NFL games. Robinhood will also allow users to trade individual player performances, a significant departure from the currently offered basic win/loss market, opening the door to greater speculation and trading volume. Robinhood plans to expand these features beyond football and eventually throughout the entire sports world. Robinhood's latest moves in the prediction market may give it a first-mover advantage.
This article, "Robinhood Continues to Heavy Bet on Prediction Markets, Entering Parlays Parlay Betting! Cryptocurrencies Face Risk of Diversion and Replacement," first appeared on ABMedia, a ABMedia .
