Robinhood (HOOD +3.36%) is a large discount broker. One of its primary goals as a business is to introduce new people to investing, which has generally led the company to lean into innovation. That includes offering new products and services, like cryptocurrency trading and prediction markets.

The company isn’t doing this out of the kindness of its heart; it generates fees for its services. The interplay between cryptocurrencies and prediction markets is one that investors need to watch very carefully.

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The source of Robinhood’s fee income is shifting

Robinhood breaks its transaction fee income down into four main buckets: stock trading, options trading, cryptocurrency trading, and event contracts…