Galaxy Digital launched an institutional over-the-counter prediction market trading desk, according to a Tuesday announcement. The firm executed a $10 million trade with crypto-native hedge fund Arca at launch, taking a position tied to the passage of the Clarity Act on Kalshi. Galaxy's OTC desk enables hedge funds, family offices, and other large investors to access event-driven contracts in sizes and with discretion unavailable through retail interfaces. Arca chief investment officer Jeff Dorman said prediction markets were the most appropriate hedging vehicle for the firm's Washington-focused positions, but existing retail liquidity was insufficient for a fund of its size. The launch follows institutional expansion into prediction markets by firms including Wintermute, BitGo, and Jump Trading.
Galaxy Digital Executes $10 Million Kalshi Trade with Arca
Galaxy's OTC desk acted as principal counterparty, enabling Arca to build the position on a bilateral basis at institutional scale. Jason Urban, global co-head of digital assets at Galaxy, said event-driven markets are becoming core to how sophisticated investors express macro views.
The offering covers non-sports event contracts on Kalshi and Polymarket, spanning economic, political, and geopolitical markets. Galaxy can pair prediction market positions with hedges in equities and commodities, allowing clients to build unified risk strategies around a single event rather than managing exposure separately across asset classes.
Galaxy Digital Plans Expansion to Additional Prediction Market Platforms
Galaxy Digital plans to expand the OTC desk to additional prediction market platforms beyond Kalshi and Polymarket. Galaxy had been exploring the space since at least November and was reportedly in talks to serve as a liquidity provider for both Polymarket and Kalshi.
Wintermute and BitGo Enter Prediction Market Trading
Wintermute extended its trading infrastructure into event contracts last week. BitGo moved earlier in March, partnering with Susquehanna Crypto to offer institutional OTC access with crypto and stablecoin collateral. Jump Trading struck market-making deals with both Polymarket and Kalshi in exchange for equity stakes in February.
FAQ
What did Galaxy Digital launch on Tuesday?
Galaxy Digital launched an institutional over-the-counter prediction market trading desk, giving hedge funds, family offices, and large investors access to event-driven contracts at institutional scale.
Why did Arca use Galaxy Digital's OTC desk for prediction market trading?
Arca chief investment officer Jeff Dorman said prediction markets were the most appropriate hedging vehicle for the firm's Washington-focused positions, but existing retail liquidity was insufficient for a fund of its size. Galaxy's OTC desk acted as principal counterparty, enabling Arca to build a $10 million position on a bilateral basis at institutional scale.
