Robinhood and Coinbase battle it out for the prediction markets customer

David Faber (Co-anchor) 00:00.000

Welcome back to Squawk on the Street. Exchanges that cater to retail traders have been racing to get a piece of the booming prediction markets. McKenzie Segalos joins us now. She's got a look at who is leading this important race, McKenzie.

Mackenzie Sigalos (Technology Reporter) 00:13.000

And David, it is a tale of two FinTechs. Robin Hood is up about 200% this year, one of the best performers in the S&P 500. And Coinbase had hit an all-time high above $440 in July, but it is now in the red year-to-date, still very much trading like a crypto proxy. And that

Mackenzie Sigalos (Technology Reporter) 00:30.560

divergence tells a story. Prediction markets let you trade on real world outcomes and the category has exploded in 2025. Weekly volumes have topped 2 billion. Cal-Shi alone hit 50 billion in annualized volume this year. And analysts say this could be a trillion dollar market by

Mackenzie Sigalos (Technology Reporter) 00:45.880

the end of the decade. Now, Robin Hood has proven prediction markets can be a breakout product inside of a mainstream brokerage. 11 billion contracts traded since launching last year. Now, it's fastest growing product by revenue in company history. and it's pushing deep into

Mackenzie Sigalos (Technology Reporter) 01:01.440

sports contracts, tied to NFL games and players territory that's traditionally belonged to Sportsbook. Now, in November, it took a majority stake in LedgerX with Susquehanna. So now it controls its own CFTC regulated exchange and clearing house. Meanwhile, Coinbase, it is

Mackenzie Sigalos (Technology Reporter) 01:17.520

playing catch-up. It launched prediction markets this month and just announced its 10th acquisition of the year, a startup called The Clearing Company run by Polymarket and Calshi veterans that gives Coinbase the tech and talent that it needs to clear and settle contracts. With

Mackenzie Sigalos (Technology Reporter) 01:32.800

the space, it is getting crowded fast. DraftKings bought its own exchange. FanDuel is teaming up with the CME. Poly Market is entering the US through a newly approved venue. So really, this is shaping up to be the next big battleground for retail trading. Sarah?