Galaxy Digital has just crossed a major milestone in the world of prediction markets. The crypto giant has announced the launch of an OTC trading service exclusively for institutional clients, with a first trade worth $10 million executed on the Kalshi platform.
This move positions Galaxy as a central player in a segment that large financial institutions have barely begun to explore — but one where appetite is growing fast.
Behind this first deal lies a powerful signal: prediction markets are entering a new era of institutional legitimacy.
Galaxy Digital Establishes Itself as an OTC Broker in Prediction Markets
Galaxy Digital has officially launched an over-the-counter (OTC) trading service for prediction markets, targeting institutional investors exclusively. To mark the occasion, the firm executed a first trade worth $10 million in partnership with Arca, a crypto asset manager, on the regulated platform Kalshi. The contract was tied to the Clarity Act, a piece of US legislation closely watched across the crypto industry.
This OTC positioning is strategic. Unlike retail-facing prediction markets — where volumes remain limited and liquidity is fragmented — the OTC format allows institutions to execute significant size without moving the order book. Galaxy acts here as both counterparty and facilitator, providing the market depth that institutional players demand.
Kalshi, a US platform regulated by the CFTC, emerges as the natural home for this launch. Its regulatory compliance is a non-negotiable prerequisite for attracting funds, family offices, and institutional trading desks that cannot afford exposure to unregulated platforms.
Why Institutions Are Finally Paying Attention to Prediction Markets
Prediction markets have long been seen as a speculative tool reserved for retail participants. The 2024 US presidential election changed that: platforms like Kalshi and Polymarket recorded volumes exceeding one billion dollars, drawing the attention of institutional desks. The pricing accuracy of these markets frequently outperformed traditional polling, reinforcing their analytical credibility.
For institutions, the appeal is twofold. On one hand, these markets offer a unique hedge against binary events — legislative outcomes, Fed decisions, election results — that cannot be effectively hedged through conventional instruments. On the other, they represent a differentiated source of alpha, uncorrelated with the price movements of traditional assets.
Galaxy Digital clearly understands this. By launching this OTC service, the firm is not simply responding to existing demand: it is actively structuring a still-nascent market and helping define its institutional standards. The choice of the Clarity Act as the first underlying is no coincidence — it is a piece of legislation directly tied to crypto regulation, a topic on which industry players hold strong conviction and have a genuine need for hedging.
A Market Taking Shape Between Regulation and Mass Adoption
Galaxy’s timing is no accident. Since the CFTC validated Kalshi‘s model for election-linked contracts, the regulatory window has opened for a broader range of prediction markets in the United States. Other players — including Polymarket, which still operates outside the US regulatory framework — are watching this development closely.
Galaxy’s entry into this segment sends a clear signal to the market: institutional trading of prediction markets is no longer a hypothesis — it is an operational reality. Other crypto brokers and prime brokers are expected to follow in the coming months, accelerating liquidity and depth across this segment.
For European and UK-based institutional players, the question of access remains open — the MiCA framework does not yet explicitly cover prediction markets. But the momentum building in the US is setting a precedent that European regulators will not be able to ignore for long.
