Robinhood Markets Inc (NASDAQ: HOOD) is slipping this morning amidst a broader sell-off in the crypto market that’s even pushed Bitcoin below the $95,000 level.
However, this pullback will likely prove short-lived since HOOD has quietly built a new business that’s growing even faster than is early crypto boom – “prediction markets”.
In an interview with CNBC this week, the company’s chief brokerage officer – Steve Quirk – said “prediction markets are the fastest-growing business we’ve ever had.”
Despite today’s decline, Robinhood stock is trading at more than 3x its price in early April.
Why prediction markets will prove a tailwind for Robinhood stock
HOOD stock appears strongly positioned for a rally to record levels in 2026, given that the company’s prediction markets business is seeing explosive engagement.
The said business was introduced in November 2024 – and has since expanded to more than 1,300 contracts across seven-to-eight- categories, including entertainment, macro data, and sports.
Customers, mostly in their 30s, have embraced the format, drawn to the ability to express opinions and back them financially.
For Robinhood, prediction markets aren’t just a niche product; it’s a mainstream hit.
The company’s scale, with 26 million users, gives it a distribution advantage that’s hard to match, and it’s doubling down with more features and an AI-powered discovery tool called Cortex.
HOOD shares to benefit as firm steals from sports betting platforms
Robinhood’s prediction markets business stands to steal from sports betting platforms – including DraftKings and FanDuel – which further strengthens the case for buying its stock on the pullback.
“We’re in a regulated space, we’re very comfortable in regulated spaces,” Quirk noted.
Unlike betting platforms, HOOD prediction markets operate more like financial instruments, with routing options similar to equities and options.
Exchanges like CME and ICE are entering the space, but they rely on it for distribution.
“Everybody who enters the space calls us and says, ‘You’re the distribution. You’re the king here,’” Quirk added.
With more than double the customer base of DraftKings, the financial technology firm is building a strong moat around the prediction market ecosystem, which will likely drive Robinhood shares higher in 2026.
How to play Robinhood Markets heading into 2026?
Buying the dip in HOOD shares seems reasonable, also because the company’s broader business is thriving.
In the CNBC interview, Quirk highlighted all-time highs in equity trading, options, margin balance, and deposits. The company’s users are young, engaged, and increasingly interested in AI-powered investing tools.
Robinhood’s new artificial intelligence assistant, Cortex, is set to expand capabilities at a December 16 event, further enhancing the platform’s appeal.
Plus, international expansion offers meaningful upside potential as well – while more than half of US households participate in markets, that figure sits in the teens in Europe and Asia.
HOOD’s mission to democratize finance is resonating globally. With prediction markets surging and AI tools gaining traction, Robinhood stock is strongly positioned for its next leg of growth.
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