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Robinhood's 220% Rally Has a Surprising Catalyst: Betting on Reality

MarketDash Editorial Team
1 day ago
Robinhood's massive 2025 surge wasn't just about crypto or meme stocks. Prediction markets became the company's fastest-growing product ever, fueling record revenues while the firm quietly transformed into a financial services powerhouse.

Robinhood Markets Inc. (HOOD) climbed over 220% in 2025, and the story isn't what you'd expect. Sure, crypto helped. Strong market conditions played a role. But the real surprise? Prediction markets became the company's breakout growth engine, outpacing every product Robinhood has ever launched.

The Financial Performance That Set the Stage

Start with the numbers. Robinhood delivered Q3 revenue of $1.27 billion, doubling from the prior year. Net income reached $386 million, up 105%. For the full year 2025, the company projects revenue between $4.6 and $4.7 billion—a 55% jump from 2024—with earnings per share expected around $1.95 to $2.07, representing 79% growth.

Customer activity exploded across the board. Equity trading volume hit a record $647 billion in Q3, up 126% year-over-year. Crypto trading volumes totaled $80 billion, evenly split between the Robinhood app and Bitstamp, the crypto exchange Robinhood acquired this year. The customer base expanded to roughly 27 million funded accounts holding over $300 billion in assets, with deposits growing at an annual clip above 40%.

Those are impressive figures. But they don't fully explain why the stock more than tripled.

Prediction Markets: The Unexpected Growth Driver

Here's where things get interesting. Robinhood partnered with Kalshi to launch prediction markets in March 2024, letting users bet on real-world events. Within the first year, customers traded over 9 billion contracts across more than 1 million users, generating annualized revenues above $100 million.

That adoption rate blew past every other product Robinhood has introduced. Ever.

In late November, Robinhood and Susquehanna International Group announced plans to acquire 90% of LedgerX, a regulated derivatives exchange previously owned by FTX. The move sets up a vertically integrated prediction markets platform, with a new exchange targeted for launch in 2026. Robinhood isn't just offering prediction markets—it's building the infrastructure to control the entire ecosystem.

Crypto and Tokenization Push Forward

Prediction markets grabbed headlines, but crypto remained a major revenue contributor. Q1 crypto revenue hit $252 million, doubling year-over-year and accounting for about 27% of transaction revenue.

In June, Robinhood launched crypto-based "stock tokens" for EU customers, enabling 24/5 trading of over 200 U.S. equities and ETFs on blockchain infrastructure. This tokenization strategy positions the company at the intersection of traditional finance and decentralized systems.

Robinhood also completed acquisitions of WonderFi and Bitstamp in 2025, expanding its crypto-exchange footprint in Canada and Europe while securing crucial regulatory licenses. The company is methodically building global reach in digital assets.

Wall Street Validation Arrives

On September 22, Robinhood joined the S&P 500 (SPY), replacing Caesars Entertainment Inc (CZR). The inclusion triggered billions in passive flows from index funds and signaled that Robinhood had reached large-cap legitimacy.

Analyst sentiment shifted dramatically. Following Q3 earnings, several high-profile firms including Citizens, Mizuho, Barclays, and Cantor Fitzgerald issued price targets between $155 and $180. The company that once faced skepticism from traditional finance had earned institutional respect.

What Comes Next

Robinhood is consolidating near $120 after its sharp 2025 rally, with price action compressing inside a tightening symmetrical triangle. The stock is holding above the rising 100-day EMA near $119, keeping the broader uptrend intact despite recent volatility.

Short-term momentum remains capped below the 20 and 50-day EMAs, which are acting as immediate resistance around $123 to $125. A decisive break above the descending trendline could reopen upside toward the $135 to $140 zone, while a failure risks a pullback toward the $113 Supertrend support.

The stock's run has been remarkable, but it's grounded in fundamental transformation. Robinhood expanded its product offerings, grew its customer base, and found a category-defining product in prediction markets. Whether that momentum continues depends on execution—but 2025 proved the company is more than a meme stock platform. It's become a diversified financial services operation with genuine growth engines.

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Robinhood's 220% Rally Has a Surprising Catalyst: Betting on Reality

MarketDash Editorial Team
1 day ago
Robinhood's massive 2025 surge wasn't just about crypto or meme stocks. Prediction markets became the company's fastest-growing product ever, fueling record revenues while the firm quietly transformed into a financial services powerhouse.

Robinhood Markets Inc. (HOOD) climbed over 220% in 2025, and the story isn't what you'd expect. Sure, crypto helped. Strong market conditions played a role. But the real surprise? Prediction markets became the company's breakout growth engine, outpacing every product Robinhood has ever launched.

The Financial Performance That Set the Stage

Start with the numbers. Robinhood delivered Q3 revenue of $1.27 billion, doubling from the prior year. Net income reached $386 million, up 105%. For the full year 2025, the company projects revenue between $4.6 and $4.7 billion—a 55% jump from 2024—with earnings per share expected around $1.95 to $2.07, representing 79% growth.

Customer activity exploded across the board. Equity trading volume hit a record $647 billion in Q3, up 126% year-over-year. Crypto trading volumes totaled $80 billion, evenly split between the Robinhood app and Bitstamp, the crypto exchange Robinhood acquired this year. The customer base expanded to roughly 27 million funded accounts holding over $300 billion in assets, with deposits growing at an annual clip above 40%.

Those are impressive figures. But they don't fully explain why the stock more than tripled.

Prediction Markets: The Unexpected Growth Driver

Here's where things get interesting. Robinhood partnered with Kalshi to launch prediction markets in March 2024, letting users bet on real-world events. Within the first year, customers traded over 9 billion contracts across more than 1 million users, generating annualized revenues above $100 million.

That adoption rate blew past every other product Robinhood has introduced. Ever.

In late November, Robinhood and Susquehanna International Group announced plans to acquire 90% of LedgerX, a regulated derivatives exchange previously owned by FTX. The move sets up a vertically integrated prediction markets platform, with a new exchange targeted for launch in 2026. Robinhood isn't just offering prediction markets—it's building the infrastructure to control the entire ecosystem.

Crypto and Tokenization Push Forward

Prediction markets grabbed headlines, but crypto remained a major revenue contributor. Q1 crypto revenue hit $252 million, doubling year-over-year and accounting for about 27% of transaction revenue.

In June, Robinhood launched crypto-based "stock tokens" for EU customers, enabling 24/5 trading of over 200 U.S. equities and ETFs on blockchain infrastructure. This tokenization strategy positions the company at the intersection of traditional finance and decentralized systems.

Robinhood also completed acquisitions of WonderFi and Bitstamp in 2025, expanding its crypto-exchange footprint in Canada and Europe while securing crucial regulatory licenses. The company is methodically building global reach in digital assets.

Wall Street Validation Arrives

On September 22, Robinhood joined the S&P 500 (SPY), replacing Caesars Entertainment Inc (CZR). The inclusion triggered billions in passive flows from index funds and signaled that Robinhood had reached large-cap legitimacy.

Analyst sentiment shifted dramatically. Following Q3 earnings, several high-profile firms including Citizens, Mizuho, Barclays, and Cantor Fitzgerald issued price targets between $155 and $180. The company that once faced skepticism from traditional finance had earned institutional respect.

What Comes Next

Robinhood is consolidating near $120 after its sharp 2025 rally, with price action compressing inside a tightening symmetrical triangle. The stock is holding above the rising 100-day EMA near $119, keeping the broader uptrend intact despite recent volatility.

Short-term momentum remains capped below the 20 and 50-day EMAs, which are acting as immediate resistance around $123 to $125. A decisive break above the descending trendline could reopen upside toward the $135 to $140 zone, while a failure risks a pullback toward the $113 Supertrend support.

The stock's run has been remarkable, but it's grounded in fundamental transformation. Robinhood expanded its product offerings, grew its customer base, and found a category-defining product in prediction markets. Whether that momentum continues depends on execution—but 2025 proved the company is more than a meme stock platform. It's become a diversified financial services operation with genuine growth engines.