Prediction Market Warning.

요약 보기

예측시장(Kalshi, Polymarket 등)은 도박이자 내부자거래 문제가 있으나 브로커(로빈후드)가 스프레드로 큰 수익을 얻어 성장 중이다. 로빈후드 예측시장 매출 약 4배(1,900만→7,200만달러), 주식 거래 스프레드 대비 예측시장 약 20배 수익성. 트럼프 행정부하에서 규제는 약할 것으로 전망. 로빈후드 PEG 약 5.7로 다소 비싸지만 성장성 긍정적이며 본인은 포지션 없음. 조정 시 관심 가능.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Coffeezilla is lashing out at the prediction markets, calling them gambling and legalized insider trading. Prediction markets are not just gambling. There's also a lot of insider trading, too. And expectedly, the brokers of these companies and employees of these companies are doing everything in their power to tell you, "No, we are not gambling companies."

02. They're qualitatively different than sports gambling. In fact, you literally have people who work for companies like Kalshi putting together tweet responses. Look at this. Elections predictions guy, uh since 2019, Kalshi user since 2024. He's got the little Kalshi logo in his username debunking Coffeezilla's prediction market claims.

03. "It's not insider trading. It's just a reveal of information. We're trying to help reduce information asymmetry." Whatever. At the same time, you have people like Vlad Tenev over at Robinhood cringing at the idea that, "Oh, no, they're calling us gambling websites." Why? What is going on here? And why are these executives recoiling at the thought of being labeled gambling companies?

04. Yeah, cuz cuz then at that point, when do you turn from investing just a straight-up gambling? It's a dog at that point. Yeah. Yeah, I think Well, in this video, as usual, I'm going to share perspective that nobody else attends to share. So, let's get into not just why these companies are so tripling down on predictions, not on gambling, and what the regulation around all of this actually is.

05. Spoiler alert, Trump got rid of most of it. So, first, what's motivating these companies? Okay, the first thing that's motivating companies like Robinhood is, of course, money. It's the same reason Donald Trump is getting into Truth Predict, which is sort of like prediction markets via Truth Social.

06. It's because of money. Look at the financial statement that Robinhood just released for the quarter ending September 30th. What you're going to find is that other revenues, which is where we see prediction market revenues, have increased almost 4x from $19 million to $72 million. In fact, they say it right here.

07. In addition, other transaction-based revenues increased by $53 million quarter, you know, year-over-year, right? Primarily driven by increased user activities in prediction markets. Ah, got it. So, the betting markets are leading to a 4x increase in revenues for Robinhood. Huh. Well, how are the other portions of their business growing?

08. Oh, well, spoiler alert, I already wrote it down for you. Crypto is up almost 2x. In fact, we can see right here, cryptocurrencies quarter year-over-year increased about 92%. However, if you look on a 9-month basis, it's only up about 45%, but let's just give crypto the benefit of the doubt and say that their revenues year-over-year, which they are up almost double, okay?

09. Then you have equities revenue. Well, equities trading was up 78%, their net revenue was only up about 50% because their rebates that they're getting from market makers and exchanges shrunk. I'll explain all that in just a moment, and options grew 27%. So, I want you just to look at this cheat sheet right here.

10. These are the growth verticals for a company like Robinhood. 4x up on prediction markets, crypto's up 2x, stock revenues are only up 50%, options are only up 27%. Now, why would that matter? Well, it matters because where there is the most growth is also where you have the largest spreads. Ah. Spreads, little complicated, I'll keep it very simple.

11. Easiest way to keep this simple for you, and then I'll prove it to you, is to understand this. When you buy a stock on Robinhood, if you buy $100 worth of stock on Robinhood, Robinhood might make about 10 cents. This is just roughly based on the total spreads that are available. So, frankly, some of this is going to be shared with market makers.

12. So, let's just say Robinhood and the market makers will make 10 cents or a dollar or two dollars, depending on, you know, what we're trading, right? And then they're going to split or share some of that. So, you go spend $100 on a stock, maybe Robinhood and the market makers make 10 cents. You go spend $100 on an option, well, Robinhood and the market makers might make about a dollar, which is really good.

13. That's 1%, right? And if you spend it on prediction markets, they make about $2. So, you can see, a user that goes in and just buys a stock makes Robinhood and the market makers about 20 times less money than the prediction markets. This makes intuitive sense because if you think about it, what do you think people do more?

14. Bet on Google search results, which are just going to be rigged by insiders at Google anyway, spoiler alert, that's exactly what's happening, or, you know, what a sports bet is going to be at the end of the year, or like which team's going to lead, or you go into, "Hey, you know, I'm going to guess what the S&P 500 is going to be by the end of the year." What do you think is more of a used market?

15. Those things I just described or Apple stock? Obviously, there's a whole lot more activity at Apple stock, and that's why there's less money to be made. Here's how to look at this. When you look at some of these prediction markets like this on Robinhood, you can see I can bet yes, 27 cents, the S&P 500 will close within a particular range.

16. So, I can bet, I'm sorry, 29 cents on a yes, or I can bet 73 cents on no. But if I add that together, I get 102 cents. Why does it not add up to 100? Because that's the spread. That's where the market makers are making money, and sometimes that goes all way up to about 103, maybe even sometimes 105.

17. There's a lot of money to be made there. Go to Apple stock for a moment. If I go to options, and I'll just pick a quick option here, like a 280 call on Robinhood, I can see the spread here is about 1%. So, I've got a 2% spread on the prediction markets. I've got about a 1% spread over here on Apple stock options.

18. Well, what if I just go to buy the actual stock? Let's put one share in. Let's throw in a limit order here. Go to the question mark. Ah, look. They actually give us transparent data of what the last sale is and what the actual spread is, the bid-ask spread. Now, the way this works is the middlemen, the market makers, they go in there and they make sure your trade's fulfilled instantaneously.

19. That's the magic of why when you swipe up, you get the little confetti. It's like, "Yay, your order is can filled is is filled." You think Robinhood is instantaneously, when you say I want to sell 27 shares of Apple, instantaneously turning around and saying, "Hey, uh who over here wants 27 shares of Apple?" And then finding somebody to pair that with?

20. No, forget that. That's way too complicated. How about this? "Hey, Kenny G, I got another guy who threw in a market order to sell 27 shares of Apple. You want to buy them?" Yeah, yeah, yeah, give them that that, uh you know, that lower price we have on the spreads there, okay? Your order gets filled instantaneously.

21. Kenny G has those Apple shares, then turns around and sells them for that higher price on that range, the ask, right? Bid-ask, eh? And they collect the difference. But as a thank you, because nobody's actually trying to give these shares to Kenny G, as a thank you, Kenny G at Citadel is going to give some kickback to Robinhood.

22. Now, how do I know that Kenny G is involved? Well, because that's also on Robinhood's financials. Oh, wow, look at this. We derive transaction-based revenues from individual market makers and exchanges. In fact, 54% of their total, look at this, as a percentage of total revenue, 54% of these transaction-based revenues came from market makers and exchanges.

23. The biggest slice of that pie was Citadel Securities, coming in at 13%. So, yeah, a lot of money is being made by Robinhood, and a lot of it is coming from market makers. And market makers love spreads. And that's why, even though we trade so many more stocks in volume on Robinhood, it's why the most profitable aspect of the business is options and crypto.

24. Because options and crypto have wider spreads. There are fewer people trading random specific options and random specific cryptocurrencies. That creates wider spreads, which means Robinhood can collect more money. Look at that. Of transaction-based revenues, you have 41% coming from options, 36% coming from crypto.

25. Only 11% of their money is coming from people trading stocks. And remember, where is the growth, folks? It's not in options. Options were only growing at 27%. So, if you're Robinhood, if you're Vlad, what do you want? You want to be where the biggest growth is and where the biggest spreads are. Okay?

26. Well, we just learned where the biggest spreads are. We saw it right here. Oh, that's my iPhone. Let me just saw it. Let me jump on over to the iPad, which I thought was plugged in. My bad. Maybe Kevin should install a switch between the two, but that's okay. I'll just brush my hair a little bit here.

27. Maybe ask you to subscribe or check out the programs over at meetkevin.com or my real estate AI company. We're closing our fundraise at the end of the month there. Not a solicitation. Read the offering circular. We are closing the fundraise at the end of the month. That's at househack.com or Reinvest, it's the same company.

28. But anyway, look at this. We know that the biggest spreads are in prediction markets, and that also happens to be where all the growth is. It's certainly not on stocks, where we're only growing 50% or options. There's more spread there, but it's not growing. So, in other words, we're not getting new users.

29. I mean, we are, 27% is still decent growth, but it's nowhere near a moon like a 4x, right? So, you're just not getting as much growth in options as you used to. You did during 2021, but now everybody wants prediction markets. So, why is Donald Trump getting into prediction markets? Because of the money.

30. Now, what's also really unique about prediction markets is, let's say we had $100 to spend on prediction markets versus $100 to spend on stocks. Okay, well, maybe you've got 2,000 stocks to pick from. But, if you make a stock bet, there's something called churn. How often are you going to turn around and sell that stock?

31. You know, if you think Apple's going to go up over the next 10 years, you're going to buy it, and you're going to hold it. Okay, well, you buying and holding does no good. But, if you take that same bucket of money you had available for trading, and you threw it into prediction markets, and there was something new to predict on that expired every three or four weeks, like, what's going to happen at the end of this month?

32. What about the end of next month? What about the end of next month? What about the end of next month? You constantly have this turnover of new dates and catalysts to trade off of. You can not only get more spreads because you're spreading that pie to more things rather than just a basket of stocks, you're spreading it to basically any event possible.

33. Eventually, we can gamble on everything. The long-term vision is to financialize everything and create a tradeable asset out of any difference in opinion. Which is exactly what they say they want. But, you're also taking more spreads, and you're doing it more often. You're getting a catalyst. You're getting a forced trade in an expiration of these betting markets.

34. The football game is over, the soccer game is over, whatever. These things happen much more frequently than actual big catalyst changes at stocks or downstream options. So, as a broker, it totally makes sense why the brokers are all over these prediction markets. And it's exactly why they don't want you to call them gambling because they don't want to get shut down.

35. Now, Coffeezilla makes a point that the gambling companies are like, this is bull crap. Nobody's showing up to horse bet anymore at our casinos and buy our, you know, get our free drinks and pay our spreads because they're all doing it from the comfort of their own home on Polymarket or Kalshi or whatever or Robinhood.

36. Which, mind you, Robinhood's really smart. Robinhood's taking the spread, but they're not actually doing the prediction markets. Robinhood partners with other companies. So, if Robinhood one day has to wash their hands of these gambling plays, they can. Robinhood is just a broker. Kalshi does the sports for them, and Forecast X does the elections for them.

37. So, this is how Robinhood is actually getting into the highest growth, highest profit financial brokering business while offloading the risk onto companies like Kalshi and and Forex X, Forecast X. Which, even though Robinhood is selling for a really expensive premium right now, you kind of have to look and go, "Huh, could some of that premium be justified under a Trump administration when we don't actually think there's going to be much regulation against anything Trump is getting into?

38. We know Trump is getting into crypto, and now we know he's getting into prediction markets. So, do we actually think the regulars are going to show up and beat on Robinhood anytime soon? If they did, Robinhood could just point to these other companies. Oh, it wasn't us, it was them. We were just doing the derivative portion.

39. But, it's probably not going to happen anyway because Trump's getting involved himself, just like he did with crypto. This is interesting to note. But, first, let me make this here argument. This page that I'm showing you right now, this is on our stock tab inside the Meet Kevin Alpha report, and I was able to pull this up with a click of a button.

40. After their last earnings, we did an analysis on Robinhood, and all I did was click on Robinhood. You can get this in the Meet Kevin app if you're a course member at meetkevin.com. Uh and I can see that the PEG ratio for Robinhood right now is actually decently expensive at about 5.7. And if we look at what I wrote here to my course members, I wrote that Wall Street estimates just 6.25% .

41. I actually wrote that I said this seems remarkably low and possibly an error. I actually think absent a labor recession, Robinhood's probably going to grow much more in part because of these prediction markets. They've also done half a billion dollars in stock buybacks over the last six months. This is actually very impressive.

42. On top of that, they paid $175 million to acquire a registered investment advisor, and it's a brilliant way to expand into registered investment advice, which is basically what Wealthfront just IPO'd on. Their robo-advisor service makes so much freaking money at Wealthfront that Robinhood is also doing that.

43. So, like, this is a great company, and I think their company is going to keep growing. And they're kind of a brilliant way to make money, in my opinion, off the prediction markets without actually playing the prediction markets or taking the risk of the prediction markets. Now, I want to be clear. I don't have longs or short or any exposure to Robinhood stock, okay?

44. I'm saying it and because I love the company and I love the way they're doing it, but I also realize that they're a little expensive right now. Now, maybe maybe they're a little expensive right now because people are pricing in a lot of this enthusiasm. But, if there's a dip on Robinhood stock, it could be interesting.

45. Part of that is because Donald Trump is so needy when it comes to regulation and making sure that regulation, let's just put it this way, doesn't actually go anywhere. Think about the SEC and the CFTC for a moment. So, the Commodity Futures Trading Commission fined Polymarket $1.4 million in 2022, blocked US users.

46. PredictIt has been fighting the CFTC for years. Back when I was running for governor, PredictIt was fighting them for years. Because I had my name in the PredictIt markets. I had like an 11% chance of being the governor of California. I got almost a million votes, you know, it was great. I think we did very well.

47. We spent very little per vote that we got, which is great. I think Gavin Newsom outspent us like 20 times. Other people spent even more. I thought we had to run a very efficient campaign. But anyway, Kalshi had to sue the CFTC to list their election contracts, and when they actually ended up getting a ruling in their favor that you can't ban election predicting, everybody got into this.

48. They're like, "Oh my gosh, this is great." On top of that ruling and Donald Trump, most people think prediction markets are safe from regulation, and the insider trading is going to go on for ever until some other institution or agency in the future under a different president actually changes it. But, as long as Trump is president, I wouldn't expect to see big regulation here.

49. And here's why. First of all, the SEC doesn't get involved in this sort of derivative insider trading. The CFTC does, the Commodities and Futures Trading Commission does, but they usually don't enforce anything unless there's fraud to get the information. And the FBI and DOJ only get involved if you actually defrauded people.

50. Now, people will make the argument that insider trading is a form of fraud, but this is where you have to ask yourself, how much regulation is there actually expected to come? When we look at what's going on with crypto, the answer is probably very little. Trump is famously anti-regulation. We know this because crypto helped Donald Trump get elected, and Donald Trump turned around and bailed out a whole lot of people.

51. Remember, Binance got sued by the SEC. That lawsuit got dropped. The CEO of Binance, CZ, got pardoned by Donald Trump, and CZ helped facilitate Donald Trump's use, or the use of Donald Trump's stablecoin, to move $2 billion of Saudi money on the Binance platform with Donald Trump's stablecoin. So, there's probably no corruption or money enthusiasm at all with crypto, right?

52. Corruption is not bad. Corruption is only bad if I'm not involved. But, I mean, then again, Donald Trump did argue that he was going to run to be the crypto president, and so you could see under the first Trump administration, the SEC filed 50 cases against crypto-related organizations. The Biden administration doubled that, filing 105 cases against them.

53. And Trump, too, has literally filed zero cases against crypto organizations. Now, I'm not here to say whether or not certain crypto organizations should be pardoned or not. I'm just here to tell you it's very interesting that when Donald Trump gets involved in a certain way to make money, the odds are, either through donation or business ties, there's not going to be any regulation for you.

54. So, if you donate to Trump, you're going to get your cases dismissed, just like Binance, Coinbase, ConsenSys, Cumberland, Kraken, Ripple, Gemini, Tron. All of them either had reduced settlements, dismissals, or frozen cases against them, and all of them either have business ties to Trump or donated to Donald Trump.

55. So, the point here is if Donald Trump's trying to make money with his tree of connections on Wall Street, like this. Trump's connected to the Gemini founders, the Winklevosses. They donate $2 million to a pro-Trump fundraising committee, and they donate to the White House ballroom, and all of a sudden the Winklevosses invest in American Bitcoin which the sons of Donald Trump are co-founding and promoting.

56. All of a sudden it looks like sort of a big old circle. And all of this is very well known. Like I think these crypto scams are going on wildly. There's this company Old Five that I've been talking about on my channel for a very long time. I think it's a complete scam. The Trump administration said, "Oh, we're joining the board." Went on Fox News.

57. This is the greatest company ever. Soon as it starts tanking predictably they're like, "No, no, no. We were never going to join the board." And they just walk away from it. Meanwhile, innocent people are throwing their money into this stuff and they're losing their money. This is why I make the argument that companies like Old Five or these crypto companies that Trump is propping up are probably nothing more than a tool to try to create profit for the Trump administration.

58. And this isn't supposed to be a slam on the Trump administration and you know all the grift that's going on. It's really just to make the argument that the odds are this administration is going to do the same thing for prediction markets that they did for crypto. That is remove the regulatory pressure.

59. Let all the nonsense run wild. And the people who are going to win are not going to be the people participating in prediction markets or the gambling that's going on. They're going to be the broker-dealers like Vlad at Robinhood that are going to make a lot of money off of this. Now obviously if we're going to a recession all these stocks are going to plummet anyway.

60. We know that. And all this sort of wild west crap will collapse. But the point is if you're looking for where to make money in these prediction markets you have to understand it's not the people mining the gold. It's the people selling the shovels. Because you've got Vlad and the Calchis or otherwise going, "Hey, hey, hey.

61. We're different." Because just because you're making a $100 bet at Vegas on a roulette table is gambling. If someone has an option contract and there are odds around me or someone going to gamble at the the Vegas table at roulette. Well, bro, that's just financial trading. It's not gambling and and we're just the broker putting together a financial product giving people the option to make these trades.

62. As long as that argument reigns and people say that's not gambling. And as long as the broker-dealers have the protection of the Trump administration which I expect they will for a very long time. At least until Trump loses leaves office. And as long as there's not a recession then the ones who are going to make bank off of this are the companies and the owners of stock related to companies like Polymarket, Calchi, crypto.com, Robinhood, all these broker-dealers and anyone getting into prediction markets they're going to get rich because they can make money way faster and way more often.

63. Remember the churn frequency than they can off of options or stocks. He asked me. He said, "Do you think we should allow insider trading in prediction markets?" And I said it's it's actually pretty it's not as clear-cut question, right? Because if your goal is to actually for the 99% of people trying to get signal about what's going to happen in the world like is the Suez Canal going to be reopened or whatever you actually want insider trading.

64. You want you know some admirable admiral sitting on a ship in the Suez Canal who has really good information to be trading so you get better higher quality signa.