BitGo Prime and Susquehanna Crypto have announced a partnership to provide institutional clients with over-the-counter (OTC) access to prediction market trading, allowing them to use digital assets held on BitGo’s custody platform as collateral. The service targets hedge funds, family offices, and high-net-worth investors, eliminating the need to convert crypto holdings into cash for event-driven contracts.
How It Works: Crypto as Collateral for Event Contracts
Under the arrangement, Susquehanna Crypto supplies liquidity, while all trades are executed through BitGo’s OTC desk. Assets remain in institutional custody and positions are collateralized, mirroring the structure of traditional derivatives trading. This design integrates seamlessly with existing compliance frameworks and custody systems, offering a streamlined workflow for institutions looking to speculate on or hedge against real-world outcomes.
Why Institutions Need a Dedicated OTC Channel
Retail prediction platforms like Polymarket have seen explosive growth but lack the regulatory and operational guardrails required by institutional investors. BitGo and Susquehanna’s solution addresses this gap by providing a private, compliant counterparty. Institutions can maintain full control of their assets while leveraging Susquehanna’s deep liquidity and risk management expertise, reducing counterparty risk and ensuring execution confidentiality.
The Prediction Market Boom: $40-45 Billion in 2025
The partnership comes as prediction markets experience a surge in volumes, reaching $40-45 billion in 2025. Key drivers include political events (e.g., U.S. elections, Trump odds), geopolitical tensions, and tech IPO speculation. The influx of institutional capital is reshaping the asset class from a niche retail activity into a viable financial instrument for hedging and alpha generation.
Outlook: A New Institutional Standard for Event-Driven Trading
By combining BitGo’s trusted custody infrastructure with Susquehanna’s market-making prowess, the joint service sets a precedent for how institutions can safely tap into prediction markets. As more asset managers seek alternative risk exposures, OTC offerings like this could become the primary gateway for sophisticated capital to participate in event-driven trading within a regulated framework.