BitGo Prime (BTGO) and Susquehanna Crypto said they are partnering to provide institutional clients with over-the-counter (OTC) access to prediction market trading, using digital assets held on BitGo’s platform as collateral.
The offering is aimed at hedge funds, family offices and high-net-worth investors, allowing them to transact event-based contracts without relying on retail platforms or converting cryptocurrency holdings into cash, the companies said in a press release on Tuesday.
Liquidity will be provided by Susquehanna Crypto, with trades executed bilaterally through BitGo’s OTC desk. The companies said the transactions will follow standard derivatives documentation frameworks. Traders use over-the-counter desks primarily to trade large or complex positions without disrupting the market or exposing their strategy.
The structure reflects how institutions already trade traditional derivatives, where assets remain in custody and positions are collateralized rather than fully funded upfront. In contrast, most of the current prediction market activity takes place on retail platforms that require pre-funding and offer limited integration with institutional custody systems.
Institutional investors are increasingly using prediction markets as a hedging tool, taking positions on the outcomes of events, such as elections, political decisions or macroeconomic changes, to offset risks in their broader portfolios. By pricing discrete real-world events, these markets offer a way to hedge extreme risks that are difficult to capture with traditional instruments such as stocks, rates or options.
Prediction markets have seen rapid growth, with trading volumes reaching approximately $40 billion to $45 billion by 2025, a growth that multiplied several-fold year-on-year as retail participation increased and platforms such as Polymarket and Kalshi gained traction.
At the same time, institutional interest has begun to build, with hedge funds and banks increasingly using these markets to discover prices around political and economic events, even as infrastructure and regulatory uncertainty continue to limit broader adoption.
Regulatory fragmentation has also slowed adoption. In the United States, platforms like Kalshi operate under the supervision of the Commodity Futures Trading Commission, while others, like Polymarket, remain offshore, limiting access for domestic institutional capital. This has pushed many companies to explore alternative structures that better align with existing compliance frameworks.
The companies said the new offering is designed to address those gaps by combining custody, collateral management and OTC execution into a single workflow. By allowing investors to trade crypto collateral without moving assets off the platform, the model aims to bring prediction markets closer to the infrastructure that institutions already use in other asset classes.
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