The Future of Crypto, Bitcoin, & Prediction Markets

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0:42PNC Bank, National Association member, FDIC. Where do you see crypto going? Because obviously that's a major staple in your end, what you guys have built with Robin Hood. We're in 2025, let's say 2035, right? yeah where do you see crypto going and bitcoin specifically yeah i think the the biggest uh needle mover for crypto is that it's going to help take the great things we built in the u.s and make them increasingly global and available to uh investors all around the world some of which haven't had access to to these tools because i think we kind of take it for granted here that We have the U.S.

1:26dollar. We have access to U.S. stocks. We have really high quality assets. When Robinhood gets our private initiatives, we'll be able to distribute access to private companies. So we have really good investments and ways to allocate your capital. If you're in Venezuela, you don't have access to those things. And that's actually why stable coins have been so popular, because a lot of these people are in countries that have unstable governments, unstable central banks. if they do have central banks at all. They don't have functional banking systems. Currencies are devaluing and they're just adding zeros and zeros to them.

2:04The bills are worthless. So stablecoins really became popular as a way to store your wealth in US dollars because the crypto companies actually went in and built local rails connecting to all of these markets. So they've been plugged into the crypto system. And I think crypto will evolve with tokenization to make it easy to distribute U.S. stocks and other investments overseas as easily as stable coins have done it to dollars. So I think that's the future. Crypto will sort of like the technology will help stitch together all of the markets and make it so that everyone is on a level playing field outside the U.S.

2:49as we are in here. That's at least the future that we're working to build. So you believe in our ecosystem, not just Bitcoin. You're not a Bitcoin maxi. I'm not a Bitcoin maxi. Yeah. I mean, I'm a Bitcoin fan and I think Bitcoin has an inherent advantage. Price prediction?

3:10Oh, price predictions are tough. I would tell you I'm pretty bull. And if you told me at the beginning of the year that there would be like a national Bitcoin strategic reserve and all of these dats and we would still be sitting here basically flat for the year maybe a little bit up i'd be i'd be surprised um uh it's got a lot going for it it's a singular asset right it'll it'll always be the first so i think i think it's got a bit of a religion around it with the bitcoin maxis and and that's hard to fight um relative to the other coins yeah i think uh obviously if you look at the correlation between the rise of bitcoin getting up to 126 ,000.

3:52You watch your stock also get toward all time high around the same time. People feel like there's a correlation there, but there's also a piece that has helped the stock and that's the predictive markets. So not only could you invest in Bitcoin, but you could say, hey, I see it getting to 100 ,000 by December 31st. Talk about the role that predictive markets have played. Because we talked about it, like you were thinking about it. We were talking about the poly market the last time we met in Miami. And now predictive markets are a thing, a real thing that i feel like you guys have adopted right away some of the other people in the space haven't yeah they're looking at you guys like this is a leader do we need to add this this is going to be disruptive yeah absolutely and it's it's kind of a fun position for for me to be in because typically when you look at crypto and all the other products we've added i mean stocks probably the best example we were like years after the leaders right i mean stocks went electronic in the 80s, basically.

4:50E-Trade got started. The idea was to trade stocks on the Apple Macintosh. Apple Macintosh had come out and these two guys got together in Palo Alto, California, and were like, what if we use the Apple Macintosh to trade stocks? And I think that was in 1982, which is pretty crazy. So we were multiple decades late to the game for electronic trading in stocks crypto started in 2009 we added crypto to the platform in 2017 actually yeah 2018 was when when you could start trading it so typically we've had an approach where we come in after there's like clarity that it's a real thing that people want and then we just bring our scale lower costs and you know better ux to the product so prediction markets is a new one for us because we were kind of out in front and then it's sort of like how do we maintain our lead and and market positioning and you know when we have a bunch of people coming after us it has surprised me that you know you have the exchanges uh like like paulie and calci who have obviously been there from the beginning but like no other broker has has gotten into it yet um uh no other broker of significant consequence and i think they're coming like they're seeing what we're doing and they see that it's resonating with traders and just with mass market retail.

6:17But yeah, I think we're also moving and we're adding new innovations. I think the event that we're going to unveil on the 16th is going to show some new things to people that they haven't seen before. And it's the fastest growing business that Robinhood's had. In the past year, we've gone from one single contract, which is the presidential election to over 1500 uh we've gone from it's basically the volume is doubled quarter over quarter uh q3 had i want to say 2.2 million contracts uh but then october had 2.5 million so more than q3 put together and then you had november we announced some november numbers uh three billion contracts traded in november which is uh yeah it's a 30 million revenue wow in a month so so 360 million run rate if you if you take uh the november numbers um which is a big ramp and i think um you know it's it's it's just been really resonating with with the traders and sports betting uh sports a big part of it but uh the big part of what we're doing is also uh diversifying the contracts so it used to be just elections and elections i think um to me is probably the most interesting then we added sports and we've added a ton of leagues there is this sports betting or like what is it exactly uh i i liked uh most people i took to call it wagering wagering okay i like the language there i think it's different uh in all seriousness to sports betting.

8:04And a lot of people ask about, you know, how is it different from a regulatory standpoint? From a product standpoint, I think it's significantly different. And I haven't really done much sports betting, but what people love about it is you can actually trade these contracts during the game. So, you know, because it's a two-sided market, the exchanges run the contracts while the games are happening. And that's when the information is coming in. I mean, for example, you can see how each play changes the odds and the outcomes. And you can go in and out of the positions. And a lot of the market participants that are coming in, both from the market maker side and sort of like on the trading side, are the same market participants that have been trading futures and equities.

8:57So I think it's disruptive to sports betting, but I see it as a fundamentally different animal and a better product, which is why I think all the traditional sports betting sites are so nervous about it. and they're just sort of like uh yeah they see the writing on the wall and they're they're working as hard as possible to figure out their prediction market strategy and some of them are outright pivoting to prediction markets completely as soon as you said the november's numbers went up i automatically thought nfl in its height college football in its height but it's not just sports and nba nba is in it this is kicking off world series is just about to end well and we have you you i think we mentioned this earlier uh ai model contracts which you know is a face i feel like I have some understanding of.

9:45And you have traders that are specializing in very specific areas. And, you know, like four months ago, it was, I think, 35 % chance that Gemini would have the best model by the end of the year. Chad GPT started the year ahead, right? And, you know, if you really, for folks that really kind of understood what was happening in the AI world, it seemed like conventional wisdom was wrong, right? You have Google who's on a steep trajectory and they have all the data, all the compute. They're highly motivated. I think now we look at the Gemini release and it's like, well, it's so obvious they had all these tools.

10:28But back then, I think conventional wisdom was wrong. So I think for a trader, it's going to open up more possibilities and you can specialize in things because there's probably at least one topic that each person understands better than the average conventional wisdom. So I think it'll pull in more traders. But I think the most interesting thing for me is that it creates a new source of information. It's almost like the new media or new news, where instead of watching talking heads pontificating about what's going to happen, you can just look at the market and then you'll learn a little bit about what's likely or what's even what's even true in this world earners what's up you ever walk into a small business and everything just works like the checkout is fast the receipts are digital tipping is a breeze and you're out the door before the line even builds odds are they're using square we love supporting businesses that run on square because it just feels seamless whether it's a local coffee shop a vendor at a pop-up market or even one of our merch partners square makes it easy for them to take payments, manage inventory, and run their business with confidence, all from one simple system.

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