Robinhood and Susquehanna Forge Agreement to Acquire LedgerX for Prediction Market Growth

Robinhood Markets and Susquehanna Group have reached an agreement to purchase a 90% stake in the regulated exchange LedgerX from Miami International Holdings. This strategic move enables Robinhood to deepen its involvement in the burgeoning prediction market sector. The new partnership is set to establish LedgerX as an independent exchange focused on futures and derivatives, catering to the rising interest in event-driven trading markets.

Key Takeaways

Partnership Agreement: Robinhood and Susquehanna acquire 90% of LedgerX from Miami International Holdings.
Independent Exchange: The joint venture will operate LedgerX independently, with Robinhood holding the majority stake.
Focus on Prediction Markets: The venture aims to establish a futures and derivatives exchange tailored for prediction markets.
Expansion Plans: Operations are expected to launch in 2026, addressing the growing demand for trading on real-world events.
Liquidity Support: Susquehanna will provide liquidity from day one, enhancing competitive trading conditions for users.

Robinhood

Introduction to the Acquisition

Robinhood Markets and Susquehanna Group have announced their agreement to acquire a 90% ownership stake in the regulated exchange LedgerX from Miami International Holdings. This significant deal further establishes Robinhood’s presence in the event-driven cryptocurrency market, aligning with the increasing interest in prediction platforms.

Details of the Transaction

The partnership intends to manage LedgerX as an independent exchange through a newly formed joint venture, with Robinhood designated as the controlling partner. Miami International Holdings retains a strategic 10% stake in the exchange, although the financial specifics of the deal have not been disclosed.

Previously, LedgerX was part of the now-defunct FTX exchange. Miami International Holdings acquired LedgerX from FTX’s bankruptcy proceedings in 2023 for $50 million, integrating it within their business operations.

With this new venture, Robinhood and Susquehanna will take control of MIAXdx, which holds the approvals needed to operate as a Designated Contract Market, Derivatives Clearing Organization, and Swap Execution Facility, creating a solid regulatory foundation for their operations.

Targeting the Expanding Need for Prediction Markets

Robinhood asserts that this acquisition will enable the establishment of a futures and derivatives exchange specifically designed with prediction markets in mind. This new exchange is expected to serve Robinhood Derivatives and other futures commission merchants, with operations slated to begin in 2026. This would provide a new high-quality venue for traders interested in betting on real-world events using crypto-based contracts.

“Robinhood is witnessing robust customer interest in prediction markets, and we're eager to build on that momentum,” shared JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood. “Our commitment to enhancing our infrastructure will enable us to deliver improved experiences and innovative products for our customers.”

Internally, Robinhood has identified prediction markets as a crucial growth area. Since its launch, customers have exchanged approximately 9 billion contracts across over one million accounts, making event contracts the company’s fastest-growing product line by revenue. This success bolsters Robinhood’s confidence to invest in a dedicated exchange and clearing facilities.

Susquehanna's Role as a Liquidity Provider

Susquehanna, recognized as one of the leading proprietary trading and market-making firms in global derivatives, will act as a liquidity provider starting from day one. The joint venture plans to incorporate additional market makers over time, ensuring competitive spreads and execution quality for both Robinhood’s retail users and institutional clients accessing the venue through various intermediaries.

This deal comes at a time when prediction markets are transitioning from niche segments within the crypto world into more mainstream finance across the U.S. Interest has surged following a federal court's decision to discard a Commodity Futures Trading Commission prohibition on election betting last year. This ruling opened avenues for regulated platforms to introduce contracts linked to political and other real-world events.

Traditional financial infrastructure responds to this growing interest. In October, the Intercontinental Exchange, which operates the New York Stock Exchange, agreed to invest up to $2 billion in Polymarket.

Furthermore, Kalshi, another significant player in the sector, recently raised funds at a valuation of about $11 billion, showcasing a strong appetite among investors for trading platforms focused on event-driven activities.

The Influence of Tech Giants on Event Market Visibility

Major derivatives exchanges like CME Group and Cboe are also exploring entry into the prediction market arena, anticipating that event contracts could complement established products such as equity index futures and listed options.

Crypto-native institutions are positioning themselves as crucial liquidity providers for this new market framework. For example, Mike Novogratz’s Galaxy Digital is currently in discussions with Polymarket and Kalshi to become a market-maker, which would enhance order book depth and facilitate the ability of large traders to navigate positions tied to events such as elections or macroeconomic updates.

Additionally, technology giants are enhancing visibility for crowd-priced event markets. Google Finance has announced its intention to start displaying live data from Polymarket and Kalshi, allowing users to monitor crowd odds in real-time in response to inquiries about future events, supplemented by traditional market data.

For Robinhood and Susquehanna, the acquisition of LedgerX presents a competitive pathway into the expanding ecosystem, merging a crypto-savvy retail user base with institutional market-making capabilities, alongside a fully licensed derivatives trading venue.