Wintermute has begun providing liquidity on prediction market platforms, extending its trading operations into a sector that has become one of the fastest-growing – and most politically contested – areas of digital finance.
Wintermute Expands into Prediction Markets as Legal Fight Intensifies
30 May 2026 - 00:05 CEST
By Ana Pereira
The London-based algorithmic trading firm said on 29 May it is quoting two-sided markets across event contracts on venues collectively processing more than $20bn in monthly trading volume. The company said the move brings liquidity infrastructure to a market that remains relatively fragmented despite rapid growth.
"Prediction markets have the demand profile of a major asset class but the liquidity profile of an early-stage one," Jake Ostrovskis, Wintermute's head of OTC trading, said in a statement. "For these markets to become a reliable real-time source of probability estimates, they need sustained two-sided liquidity."
Growing market
Prediction markets allow traders to buy and sell contracts tied to the likelihood of future events, ranging from elections and economic data releases to sporting outcomes and policy decisions.
The sector has grown rapidly since the 2024 US election. Polymarket processed more than $11bn in election-related volume during the campaign, while Kalshi's weekly trading volume topped an estimated $3bn as it expanded beyond political contracts into sports and economic events.
Wintermute said it sees the sector as a natural extension of its existing digital asset business because many prediction market platforms rely on stablecoins, public blockchains and crypto-native settlement systems. The firm reports more than $3.5tn in annual trading volume and provides liquidity across more than 70 exchanges.
Political battleground
Wintermute's expansion comes as prediction markets sit at the centre of an escalating jurisdictional battle in the US. Kalshi has fought lawsuits from states including Nevada, New Jersey, Massachusetts, Wisconsin and Washington, which argue some event contracts amount to unlicensed gambling.
Ron Hammond, Wintermute's head of Policy and Advocacy, described prediction markets as one of the next major policy battles facing digital assets, comparing their current position to decentralized finance years ago.
"It's gonna go to the Supreme Court," Hammond told Sandmark, arguing that the core issue is whether prediction markets fall primarily under the Commodity Futures Trading Commission (CFTC) oversight. Kalshi maintains that its markets fall under the exclusive authority of the CFTC, which regulates derivatives exchanges.
Hammond said the sector's rapid growth has been met with increasing pushback from established interests in Washington. While financial firms see significant commercial potential in prediction markets, he said some lobbying efforts are focused on slowing their expansion, with executives effectively telling policymakers to "stall, kill or delay" progress. He added that the industry's regulatory momentum could still slow if future administrations take a more sceptical view of prediction markets.
