# Robinhood Super App Strategy and Prediction Markets

**Podcast:** The Milk Road Show
**Published:** 2026-07-07

## Transcript

The cadence at which Robinhood develops and gets into market new products is absolutely best in class.
Every year, they're launching a handful plus of products, some of which really hit, others less so, but that's fine.
The point is, is they're always like on the bleeding edge of innovation.
And that innovation is what led to now a dozen plus business lines of 100 plus million revenue.
The Robinhood chain is live and the race to build the super app of finance is on, but can Robinhood win?
What is their strategy?
Who are their competitors?
And what do you need to know about all of this?
Hello and welcome to the Milk Road Show, the podcast that knows that the real financial super apps were the old Bitcoin faucets that used to just distribute free Bitcoin to anyone who wanted them.
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Look it up.
I'm your host, John Gillan.
Today is Tuesday, July 7th, and today we are joined by Samuel Andrew.
Sam is a crypto and markets analyst at North Island Ventures.
where he focuses on equity research and investments in digital assets and related technologies.
Previously a hedge fund analyst at Blue Mountain Capital, Sam is going to break down a ton of alpha today and give us the latest on Robinhood.
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Without further ado, welcome back to the Milk Road Show.
Sam, how are you, sir?
Hey, John, I'm doing great.
Thanks for having me back.
I'm excited to talk to you.
I think a lot of people are focused on Robinhood right now with the recent announcements from them.
I wanted to start with a report that you published.
You co-authored this with Artemis on Robinhood.
It's called Why Robinhood is Positioned to be the Winner of Retail Finance.
And I'd love if you could start us out with a high-level outlook on this report and just give us the thesis on Robinhood here.
Sure, John, I'll do that.
Quickly, I need to read you just a two-sentence disclaimer, which will be very evident that I'm reading it, and then we can get right into it.
So North Island Ventures is a registered investment advisor.
Anything I say on this podcast is for informational purposes only.
It's not investment advice or solicitation.
Accounts advised by North Island Ventures hold positions in Robinhood, and we may trade in Robinhood stock at any time.
And obviously, investing involves its own risks, and everyone should be doing their own research.
Okay, now we got that out of the way.
The Robin Hood thesis.
Anybody who has to read their own disclaimer, you know is legit.
So this is already a good sign.
I'm already bullish on this conversation.
So yeah, please continue.
Robin Hood.
Okay, I'll walk us through very high level the thesis, and then there's probably different attributes of that we can talk in a little bit more detail.
So simplistically, Robinhood is developing a financial super app designed for all your financial needs.
And with that comes a much higher monetization per user.
And we can talk through the kind of drastically different monetization from Robinhood and its competitors.
The second thing that's happening with Robinhood that's part of the thesis is that it's evolving from this highly cyclical trading oriented business.
to a secular growth story.
That secular growth comes from a whole bunch of different product launches that Robinhood has had, as well as what's estimated to be an $80 trillion general wealth transfer from boomers to younger generations.
With that transition, Robinhood evolves into a much higher quality business.
Kind of tactically right now, the third thing to point to is that there's a sequence of things happening in the second half of this year and actually have started to play out already that should drive a lot more engagement towards Robinhood, particularly prediction markets.
They've launched their kind of vertically integrated prediction markets.
We also have a really strong calendar for prediction markets.
We've got the World Cup happening right now.
We've got the midterms coming up.
Then we'll get a full NFL season.
And then you also have these like mega IPOs, right?
SpaceX just happened.
Anthropic is likely on the way.
And those things are events that catalyze more customer engagement that should help.
really accelerate growth for Robinhood in the second half this year and maybe into next year.
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Okay, so there's a couple of pieces of this that I want to unpack a little bit more.
But the first one is this idea of prediction markets.
And in this report, you said that this is an emerging asset class.
And I thought that was an interesting framing of prediction markets.
Most people, I don't think, really think of them in that way.
Could you walk us through why you think this deserves to be treated as its own asset class and how you see prediction markets sort of evolving here?
Yeah, so it's a new asset class in the sense that It's a new way for people to invest, to speculate, to effectively express an opinion on a certain outcome, right?
In a way, in a medium that wasn't available before.
That's all we mean by like, it's a new asset class.
And what we've seen is a tremendous growth in prediction market volumes from like a few billion dollars, you know, earlier this year in daily trade volumes to now off the back of the World Cup.
pushing like 15, maybe $20 billion of daily volume.
It's enormous, the type of growth that we've seen.
Now, a lot of that is sports driven.
And that sports is proving to be the testing ground of how a whole bunch of these markets could work.
We suspect that in time, that'll grow beyond sports to all sorts of different fields.
And I think to take a step back, what's really important to understand for Robinhood is We think Robinhood is probably in a position to win in prediction markets.
And prediction market is probably a winner take all to win or take most market because liquidity is so important in these different pools, in these different markets, right?
Markets being a bet on a certain outcome, whatever that may be, politics, weather.
financial data, sports, what have you.
You want liquidity in that specific market because with liquidity, you can put on more trades and price discovery happens where there's the most liquidity.
And so why we think Robinhood may be in position to win in prediction markets is I think there's two critical things to win in prediction markets.
One is distribution and second is the user experience.
So one for distribution, Robinhood has about 28 million funded accounts on its platform.
That's significantly bigger than the other prediction markets that don't necessarily disclose their figures, but we estimate are in the like mid to high single digit millions.
The second thing is user experience.
Robinhood is known and you've probably used the app.
I'm a regular user of the app, has the best user interface.
and ability to develop financial innovation in an app-based mobile-first product.
Not only that, but if you go to the Robinhood app, then you'll be able to engage in prediction markets in a way that you can't on any other platform.
I can give you an example of that.
Say you want to be interested in something related to Tesla.
Robinhood in time could probably serve you up like, well, you could buy Tesla shares, you could buy Tesla options, or you could buy prediction markets related to this particular quarter on what the revenue number is going to be or how many Model Ys they sell.
There's a few regulatory things that need to happen in order for that to come to fruition, but it gives you a flavor of the type of user experience that can be facilitated in Robinhood that quite frankly, I don't think the other prediction markets can offer that holistic experience.
okay so how big do you think this prediction markets market this asset class is likely to get because just like you said we've seen really huge growth from it in the last year actually the last two years really but i think it's hard for a lot of analysts to get a handle on how big this is going to get how sustainable this is what are your thoughts on that in terms of the the long-term value or size of this asset class yeah um Listen, there's things that we try and forecast and predict and other things that we realize are very difficult to forecast and predict.
The size of prediction markets is one of them.
And I think what's compelling about Robinhood from a thesis standpoint, prediction markets is one of several avenues that Robinhood has for the business and the stock and so forth for the investment to win.
If they win in prediction markets, great, even better.
If they don't...
Then there's a few...
They now have like a dozen plus business lines that generate 100 million in revenue.
So it's helpful, but it's not...
If Robinhood doesn't win in prediction markets, by no stretch, it's a game over.
So back to your question of how big it could be, I don't really know.
my suspicion is significantly bigger than it is today because these products are just starting to get into the market right they're new developments particularly in the us robin hood has disclosed that they have about one and a half million of their users have touched prediction markets they have 28 million users right it's a fraction that have actually just just even traded one of these contracts what i do think will happen though is The growth will happen, but it'll be volatile along the way.
Because of the nature of prediction markets, certain events draw a lot of attention, such as the World Cup right now, elections, things like that, draw a lot of attention, volume spike, and then come off.
What I can also tell you is earlier this year, into the end, during NFL playoffs and then culminating in the Super Bowl, you'd usually expect that to be a local peak in prediction market volumes.
And it turned out to not be the case.
If we look across Pauly Market, College, and Robin Hood, kind of all the big players in that space, volumes continue to grow even after the Super Bowl.
So that gives you an indication that there's still significantly more growth to be had.
Exactly how it all pans out, we will see.
We will see.
Sam, you mentioned in your answer that Robinhood now has, I think it is like 12 or 13 different lines of business that are all generating over $100 million of revenue.
Last week, they had their World is Flat event where they announced a lot of new things in the crypto space of perpetual contracts, the Robinhood chain, several other products.
And I'm curious, you're like.
overview of their business here and how these new products fit into that.
Do you think this is going to drive another $100 million of revenue for Robinhood or just what are your thoughts around this?
Are there a tokenization business particularly?
I can touch on tokenization and then kind of the broader product suite.
Take it however you want.
Okay.
Tokenization is likely helpful in...
like the next few years.
It's not really a needle driver right now.
And the reason tokenization is helpful for them is that it enables them to penetrate international markets a little bit faster, most likely a little bit faster.
And right now Robinhood is pretty much entirely the US business.
So the idea that you can go kind of carry their brand, their know-how and so forth in different European and kind of South Asian markets and doing that in a tokenized format.
should be easier at least to first penetrate.
Thereafter, tokenization could become a bigger deal because it does streamline the transfer of assets.
So that should lower the cost base of Robinhood's business model.
We will see that's a few years out.
The more important picture, broader picture is Robinhood's product development, the cadence at which Robinhood develops and gets into market new products is absolutely best in class.
Every year, they're launching a handful plus of products, some of which really hit, others less so, but that's fine.
The point is, they're always on the bleeding edge of innovation.
And that innovation is what led to this now a dozen plus business lines of 100 plus million revenue.
What's so important about all those different product lines and the different products that Robinhood has addresses this like why now question.
The why now insofar as this 80 trillion generational wealth transfer that we expect from boomers to younger generations, six months ago, certainly 12, 18 months ago, Robinhood was not in position to absorb those assets.
right because they didn't have retirement products they didn't really have savings products it was really just like a place where you could go trade speculative assets and that's what i mean by robin hood is going through this transition from a cyclical business to a secular growth driver because it finally has the full product suite across retirement savings they've launched banking products now spending with their credit card and investing and yes also speculation whether that be prediction markets options so forth but a wide swath of products that really caters to anyone's financial needs.
And that wide swath of products is what enables them to absorb this large capital base that is likely coming their way.
And to put that kind of in numbers, Robinhood users right now have about $12,000, give or take per account.
The larger brokers that cater to an older demographic.
have anywhere between like 150 000 to like over 300 000 per account so there's an enormous difference there in how much capital people have on these more established brokers versus robin hood and we believe that over time that will converge but the first step in doing that was robin hood developing all these products which they've now done real world assets like funds treasuries and private credit are still running on rails built decades ago Gated, paperwork heavy, slow to settle.
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Gotcha.
Okay.
That makes a lot of sense there.
I want to bring up another thing, which I've seen you comment on, which I thought was a really interesting insight.
You said that Robinhood Gold, which is the subscription service on Robinhood, is becoming the new Amazon Prime.
And that was a big way Amazon grew their business.
recurring subscription service for Robinhood.
Why is this such a powerful business driver for them?
And what about this is standing out to you as a real big value driver for the company?
It's a real big value driver.
And I think it's something that is broadly misunderstood.
We talked about roughly $12,000 per account across all of Robinhood's account, but the gold subscribers are the power users.
They probably have five times the amount of assets.
on Robinhood as other accounts.
The reason that's so important is because how Robinhood makes money is capital on their platform.
The more capital they have on their platform, the more these different product lines they can sell to that capital holder.
The analog to Amazon Prime, I think, is a really good one because as we probably all know now, Amazon Prime was the key wedge to get Amazon customers to engage with Amazon on a regular basis and develop new purchasing habits.
I think something similar could happen with gold.
And the idea behind gold is you practically give away, it's $50 a year, a product to customers that we estimate could be worth like $800 or so worth of value you get across a whole bunch of discounted products you get from Robinhood.
And then once you have access to all these different products, you start depositing a lot more capital on Robinhood.
And it's great unit economics for Robinhood.
We estimate probably like a three-month payback.
And gold subs have been growing pretty consistently.
they're roughly 16% of total subscribers for Robinhood today.
Whereas Amazon, like Amazon Prime estimates are like 80% of like the real power users on Amazon are Amazon Prime.
And so what that really means is as you get more gold subs, you get a lot more capital on Robinhood.
And then as you have more capital on Robinhood, you can monetize that capital at a much higher rate.
And to give you a simple example of that, right now, the monetization rate, which people refer to as average revenue per user, is about $160 on Robinhood.
Their competitors monetize somewhere between like $600 and $1,400 per user.
So that also gives you an idea of the magnitude of the increase in monetization that Robinhood can get to.
And we think that gold sub like Amazon Prime is a real wedge in how Robinhood is going to get there.
I'm curious your thoughts on this.
Financial super app thesis that Robinhood seems to be going after here.
There are a lot of other competitors that might be trying to play for that market share.
Coinbase is one that comes to mind.
And I'm just curious if you have any thoughts on some similarities, differences between these companies, their business models, and who do you think is the front runner to be the financial super app and why?
Like, why do you think that Robinhood has a lead over a Coinbase, for example?
So I do think Robinhood has a lead over Coinbase.
And we can...
kind of substantiate that a few different ways.
One is the number of users, the 27-ish million users.
Robinhood doesn't really, sorry, Coinbase doesn't really disclose the number of users it has anymore.
The product breadth as well.
Robinhood has a much wider product breadth than Coinbase has.
Also with that product breadth is much higher pace of innovation at Robinhood.
And then taking a step back, they are both trying to get at the same thing of like this financial super app but they are coming at it from two different avenues coinbase is coming at it from like a crypto first um perspective their users are primarily crypto natives that most their capital is in crypto assets that in my opinion is a fairly narrow avenue Whereas Robinhood is coming at it from a much wider avenue.
Its customers have equities, they have options, they have crypto assets, they have prediction markets positions, they have a much wider swath of assets.
Plus, they also have retirement accounts.
So that much wider avenue enables Robinhood to capture much more capital.
and i think ultimately it enables robinhood to have a larger what's called share of wallet of all your capital you may have how much you're going to put at robinhood probably a lot more because of all these different products it has whereas with coinbase the share of wallet is likely going to be smaller because what people know coinbase for is crypto and so you may keep your crypto assets rob with coinbase but you may you actually historically have had to have all your assets somewhere else That's not the case with Robinhood.
You can have all your assets there across all these different asset types.
Sam, you said something interesting in this conversation I want to come back to.
You said that you believe that tokenization for Robinhood isn't an immediate needle driver, but it might help them penetrating some of these other markets outside of the United States.
Could you explain a little bit more about what you meant by that and how tokenization might help Robinhood sort of expand their market share?
Yeah, right now it's primarily used as a marketing thing whereby they've tokenized certain assets of stocks, private companies, things like that, that they're using as a marketing tool in Europe to get customers on their platform.
That's how it's helping them get into those markets.
It's a helpful marketing angle, but right now it's not a needle driver.
What do you think will be the needle driver?
Like you said that like they're going to have a bigger share than Coinbase of your overall wallet.
And there's a lot of other products on there on the Robinhood platform that draw a lot of users.
What do you think is going to be the thing that drives the needle in terms of getting more adoption for Robinhood outside of the US?
Yeah, like entering new markets will be helpful.
But the most important thing for Robinhood, and they can do this.
you know their growth the majority of their growth for the next while will be in the us so the most important thing for robin hood is growing assets on platform and they're like north star is the net deposit growth kind of every month every quarter and that's you know that's a barometer for how much incremental capital existing and new customers are depositing on its platform that is the most important thing for robin hood and I know it, they know it, they talk about it.
And it's our view that how you grow net deposits, it's product innovation.
Just having the best product suite helps people deposit more assets.
That's what I was saying.
Historically, they haven't even had the product suite to get net deposits.
And then gold subs as well of having this very valuable subscription model that you give preferential access.
discounted access to products based on the subscription, and then even more capital starts flowing away.
So those are the most important things for Robinhood.
And with more capital enables you to monetize, enables Robinhood to monetize that capital at a higher rate.
Last week at the World is Flat event, the Robinhood crypto event, they announced an earned product that offers 7% yield.
And that has already apparently been driving a lot of capital coming onto the Robinhood platform.
As you said, that's a big needle driver for them.
How important is that product in your mind in terms of this thesis and in terms of attracting more capital to Robinhood?
It's fairly important, but I just want to separate kind of two things.
What has historically been a very helpful product for Robinhood is their cash earned product that you deposit your cash in and now generates three-ish, a bit more percent than that.
And that was, if you're a gold sub, you get full access to that.
So effectively, you go, instead of having your cash hitting in a checkings account in your bank or even a money market fund, Robinhood automatically takes care of that and earns depending on where treasury rates are.
three plus percent.
Historically, it was even higher than that.
And so that was a big driver to get people to deposit their cash on Robinhood.
What they announced last week is something slightly different that will help.
And it has a much higher yield.
It has a seven-ish percent yield, but that's particularly stable coins that need to be deposited into Morpho and then lent out thereafter.
So it gets a higher rate.
higher risk associated with that because you're effectively then lending out that capital.
This is one of those things where it's helpful at the margin, but I don't think the product that was announced last week is that much of a needle driver.
Maybe in the future, it will be.
It's again, an example of Robinhood laying the groundwork for a whole bunch of different products and seeing which ones will really grow and those are the ones they'll cultivate.
I'm interested in your thoughts on another competitor who's in this landscape that I think a lot of people overlook.
But Meta has been talking recently about launching prediction markets in the past.
They have explored their own form of a stablecoin.
And it seems like if the Clarity Act passes, we might be in a world where Meta and their – 3 billion very loyal users are suddenly presented with a host of new products that might compete in this super app landscape.
How do you think about that as a risk for Robinhood's business?
And, you know, I mean, obviously it's kind of like a, like a thing on the horizon that may or may not happen, but is that something you think about or what do you see happening there?
I mean, yes, it is a risk on the horizon, like meta doing anything in like the world of fintech is a risk and not to be taken lightly.
It's not my like, biggest risk right now and it goes back to what i was saying around how i think you win in prediction markets it's distribution and the product experience now rob meta has arguably the best distribution in the world so they win on distribution but on like product experience it's like well are you going to be trading product you know prediction markets in your instagram feed or in your like you know your facebook feed That I'm less certain about.
And then another point on the product experience, the Tesla example I was giving earlier, where in Robinhood, you could conceivably trade or invest across a whole bunch of different Tesla exposures from equity options, prediction markets, like Meta can't do that.
So that's why I still kind of lean towards like I see Robinhood winning this out.
Because they're in a position where their product experience, like no other competitor can compete with them from product experience standpoint, at least right now.
Okay.
So their big advantage is the first mover advantage, the...
capital liquidity they've got, but then the speed and effectiveness of their product innovation has been just strongly better than most of the players in the market.
And that's given them a bit of a moat, just their product is really great, right?
That's kind of the thesis there.
They can combine all these different products together.
That makes them like the best product in class.
And then for prediction markets in particular, as the market continues to grow and they should get more liquidity in these different markets, then you know that further enshrines their mode in prediction markets they're not there yet but i suspect that could be where it goes okay we talked a little bit about meta in coinbase and you said like you know gave some thoughts on why you think robin hood has some advantages there is there anything that could invalidate this thesis on robin hood for you is there is there something you're watching for um that might make you flip bearish on them or just like what what scenario might come up where you could see yourself maybe taking a different view on this situation and getting bearish on Robinhood?
Yeah, if their net deposits start slowing, the net deposits or gold stuff start slowing, that's an invalidation of the thesis.
And that would get me to change my mind.
There's a few other things on the horizon, but those are the things we're laser focused on.
Okay, cool.
Sam, I think we covered a lot on Robinhood here.
I really appreciate you coming on the Millcroach Show to share these things.
I think you write a lot of great content and research on digital assets and businesses in this space in general.
What are you working on next?
Or what is something on the horizon that you're looking at, you're researching right now?
What's got your attention at the moment?
Sure.
So maybe I can...
you know, fill you in a little bit more on North Island Ventures and that'll kind of set the landscape a little bit.
So North Island Ventures, we're a technology fund based in New York, we have about half a billion dollars in assets.
And we invest both at the venture stage, seed stage in particular, and in kind of in the through a hedge fund.
So two separate funds.
all thesis driven kind of at the intersection of blockchain, crypto, fintech, and increasingly AI.
And those three avenues are the things we spend kind of all our time on from agentic finance.
We recently published, I think a pretty helpful presentation on our views.
on agentic finance.
We spend a lot of time on understanding the entire AI supply chain from how power is generated to how tokens are used when you're using open AI or anthropic products.
And then our bread and butter historically has been everything digital assets, crypto.
We've been very deep in DeFi for many years now.
So we've got a fairly wide aperture of things to look at that.
that keep us very engaged.
And there's never a shortage of ways to pique our curiosity.
Well, Sam, I think you've always piqued my curiosity with your research.
I think your audience really appreciates you coming on and sharing your insights as well.
Where can we send people to find more of you and your work online?
Where's the best place to find you?
Sure, X is probably the best.
It's...
uh samuel m andrew you can find me on on x and um yeah let me know your thoughts and be be curious to engage well everybody go go tell sam your thoughts i'm sure he'd be appreciative of that uh sam thanks so much for being on the milk road show i hope we can catch up again soon you bet thanks john Thank you all for joining us.
I hope you all learned something today.
Until next time, stay safe, stay educated, stay bullish, and we will see you all in the next episode of The Milk Road Show.
Thanks for being here, everyone.
Bye.
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