Crypto investment firm Galaxy Digital has entered the institutional over-the-counter (OTC) prediction markets trading business, executing a $10mn trade tied to the outcome of US crypto legislation as event-driven markets continue attracting interest from hedge funds and traditional trading firms.
Galaxy Opens Institutional Prediction Markets Desk with $10mn CLARITY Trade
2 June 2026 - 17:27 CEST
By Matt Neill
The company said in a statement on 2 June that its global markets desk will provide institutional clients access to prediction markets on platforms including Kalshi and Polymarket, while allowing positions to be combined with hedges across equities, commodities and other assets.
Galaxy said it completed its first transaction with crypto hedge fund Arca, which used the desk to take a position linked to the passage of the CLARITY Act, the US crypto market structure bill currently before Congress.
Prediction markets go institutional
The launch marks another step in the rapid maturation of prediction markets, which have expanded from a crypto-native niche into a multi-billion-dollar market increasingly focused on politics, economics and geopolitics.
Monthly trading volume on prediction markets surpassed $20bn earlier this year, according to TRM Labs, with contracts tied to elections, military conflicts, central bank decisions and regulation now accounting for a growing share of activity.
"Event-driven markets are becoming core to how sophisticated investors express macro views," said Jason Urban, global co-head of Digital Assets at Galaxy, while Arca chief investment officer Jeff Dorman said the firm used Galaxy's desk because prediction markets still lack the liquidity needed for larger institutional trades.
Wall Street joins the trade
Institutional interest in prediction markets has accelerated as major trading firms seek new sources of alpha and price discovery.
Top-tier market makers, including Jane Street and Hudson River Trading, have become active participants in Kalshi, helping deepen liquidity and narrow spreads. Supporters argue prediction markets can aggregate information more effectively than polls or analyst forecasts, while critics continue to raise concerns around market integrity and regulation.
Galaxy said institutional participation should improve market efficiency by bringing larger pools of capital and professional analysis into the sector, further blurring the lines between traditional finance, derivatives trading and digital assets.
