Galaxy Digital said Tuesday it has launched over-the-counter prediction markets trading for institutional investors, adding a bilateral trading model to a segment that has largely been dominated by retail platforms. The Nasdaq-listed firm said the service is designed to give hedge funds, family offices and other professional investors access to event-linked contracts with liquidity and trade sizes that are often hard to obtain on retail-focused venues. Galaxy shares fell 6% on Tuesday, in line with the broader crypto stock market.
The offering is being rolled out through Galaxy’s global markets trading desk. Clients can trade contracts tied to political, economic and geopolitical events, a category that has drawn more attention over the past two years as prediction markets gained traction among investors looking to express views on elections, central bank decisions and regulatory developments. Platforms including Kalshi and Polymarket have been among the main beneficiaries of that growth.
Initial product covers non-sports contracts on Kalshi and Polymarket
Galaxy said the service initially includes non-sports event contracts traded on Kalshi and Polymarket, with plans to add more venues later. The firm also said clients will be able to pair prediction market positions with hedges across equities, commodities and other asset classes, allowing broader event-driven strategies rather than isolated wagers on a single outcome. In practice, the model is built for large tickets and customized execution, not retail-style order flow.
$10 million transaction tied to proposed U.S. crypto legislation
As part of the launch, Galaxy facilitated a $10 million trade for crypto-focused hedge fund Arca linked to the outcome of the proposed Clarity Act, a bill intended to establish a regulatory framework for digital assets in the United States. Jason Urban, Galaxy’s global co-head of digital assets, said in a statement that event-driven markets are becoming central to how sophisticated investors express macro views and that institutional-grade infrastructure should keep pace.
Jeff Dorman, Arca’s chief investment officer, said prediction markets have been an effective way to hedge the fund’s exposure to ongoing negotiations in Washington over crypto regulation. He added that liquidity constraints on existing platforms have made direct participation difficult for large investors. By acting as principal counterparty, Galaxy said it can warehouse risk, facilitate larger trades and offer more discretion than exchange-based execution.
Institutional participation expands across the sector
The move points to a broader shift in prediction markets as institutional firms begin to enter a sector that historically leaned heavily on retail traders. Earlier the same day, Polymarket completed its first block trade in a transaction involving crypto broker FalconX and trading technology startup Anera Labs. Industry observers say firms such as Galaxy could help deepen liquidity and improve price efficiency, while critics continue to point to regulatory uncertainty as a major constraint on the sector.