Galaxy Digital (GLXY) said on Tuesday it had launched over-the-counter (OTC) prediction markets for institutional investors, becoming one of the first major digital asset companies to offer large-scale access to event-driven markets through a bilateral trading framework.
The Nasdaq-listed company said the new service, offered through its global markets trading desk, will allow hedge funds, family offices and other institutional investors to trade contracts linked to political, economic and geopolitical events while accessing liquidity and trade sizes not typically available through retail-focused prediction market platforms.
The company’s shares fell 6% on Tuesday, in line with the broader crypto stock market.
The launch comes as prediction markets have gained traction among investors looking for ways to express opinions on real-world events ranging from elections and central bank decisions to regulatory developments. Platforms like Kalshi and Polymarket have seen rapid growth in the last two years, and many crypto-native companies have entered the market.
Galaxy said its offer initially covers non-sporting event contracts negotiated at Kalshi and Polymarket, with plans to expand to additional venues. The firm will also allow clients to combine predictive market positions with coverage of stocks, commodities and other asset classes, creating broader event-based investment strategies.
As part of the launch, Galaxy facilitated a $10 million trade with cryptocurrency-focused hedge fund Arca tied to the outcome of the proposed CLARITY Act, legislation that would establish a regulatory framework for digital assets in the United States.
“Event-driven markets are becoming fundamental to how sophisticated investors express macroeconomic views, and they deserve an institutional infrastructure to match,” Jason Urban, global co-head of digital assets at Galaxy, said in a statement.
Jeff Dorman, Arca’s chief investment officer, said prediction markets offered an effective way to hedge the fund’s exposure to ongoing negotiations in Washington over cryptocurrency regulation, but liquidity constraints on existing platforms made it difficult for large investors to directly participate.
The move reflects a broader institutionalization of prediction markets, a sector that has historically been dominated by retail traders. By acting as a primary counterparty, Galaxy can store risk and facilitate larger transactions, while offering greater discretion than exchange-based transactions.
Earlier today, Polymarket completed its first trading block in a transaction between cryptocurrency broker FalconX and trading technology startup Anera Labs.
Industry observers say the entry of companies like Galaxy could help deepen liquidity and improve pricing efficiency in prediction markets by attracting professional investors to the space. Supporters argue that greater institutional involvement could make market prices more useful as indicators of future outcomes, while critics warn that regulatory uncertainty remains a key challenge for the sector.
The launch further expands Galaxy’s growing trading and derivatives business. The New York-based company, which offers institutional digital asset trading, asset management, staking and tokenization services, has increasingly positioned itself as a bridge between traditional financial markets and emerging digital asset infrastructure.
