Robinhood Markets and Susquehanna International Group are reportedly set to acquire a significant stake in LedgerX, a company with ties to the now-defunct cryptocurrency exchange FTX, as part of a strategic move into the prediction markets sector.
According to a report by Reuters on Tuesday, Robinhood and Susquehanna intend to acquire a 90% stake in LedgerX. This acquisition positions LedgerX as one of the few solvent entities connected to FTX following its bankruptcy in 2022. The news emerged shortly after Robinhood announced the launch of its own futures and derivatives platform, which includes options for prediction markets.
Robinhood had previously disclosed its acquisition of a majority stake in MIAXdx, an exchange and clearinghouse regulated by the US Commodity Futures Trading Commission. MIAXdx, formerly known as LedgerX, was acquired by Miami International Holdings (MIAX) for $50 million in 2023 during FTX's bankruptcy proceedings. MIAX is expected to retain a 10% ownership in the firm, as indicated by Reuters.
MIAX CEO and chair Thomas Gallagher commented on the transaction, stating, "Through our retained equity stake, the transaction announced today will provide MIAX with access to the growing prediction markets on an expedited basis."
This acquisition could significantly enhance Robinhood's competitive standing against major prediction platforms like Kalshi and Polymarket. Prediction markets have experienced substantial growth in 2024, with a notable portion of this surge attributed to interest in outcomes related to US elections.
Industry Landscape for Prediction Markets
The prediction market sector has seen increased activity since a federal court cleared the way for Kalshi to offer event contracts tied to US elections in October 2024. This development has attracted considerable investment from both within and outside the cryptocurrency industry.
Kalshi recently reported an increase in its valuation to $11 billion following a funding round led by Sequoia Capital and CapitalG. Simultaneously, Polymarket secured a regulatory approval on Tuesday, with the CFTC greenlighting the company to operate a US-intermediated trading platform.
Additionally, the cryptocurrency exchange Coinbase is reportedly developing its own prediction markets platform, with support from Kalshi.
Following the announcement of the LedgerX acquisition, Robinhood's shares on the Nasdaq saw a surge of approximately 8% in the hours afterward, reaching $125.24 at the time of publication.