Galaxy Digital (GLXY) announced on Tuesday that it has 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-based markets via 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 tied to political, economic and geopolitical events while accessing liquidity and trade sizes typically unavailable through retail-focused prediction market platforms.
The company’s shares fell 6% on Tuesday, in line with the broader cryptocurrency stock market.
The launch comes as prediction markets gain traction among investors looking for ways to express their views on real-world events, from elections to central bank decisions to regulatory developments. Platforms such as Kalshi and Polymarket have seen rapid growth over the past couple of years, with many crypto-native companies entering the market.
Galaxy said its offering initially covers non-sporting event contracts transacted across Kalshi and Polymarket, with plans to expand to other venues. The company will also allow clients to combine predictive market positions with hedges across stocks, commodities and other asset classes, creating broader event-driven investment strategies.
As part of the launch, Galaxy facilitated a $10 million transaction with crypto-focused hedge fund Arca, tied to the outcomes of the CLARITY bill, legislation that would establish a regulatory framework for digital assets in the United States.
“Event-driven markets are becoming essential to how sophisticated investors express their macroeconomic views, and they deserve an institutional infrastructure to match,” Jason Urban, Galaxy’s global co-head of digital assets, 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 regarding crypto regulation, but liquidity constraints on existing platforms made it difficult for large investors to participate directly.
The move reflects a broader institutionalization of prediction markets, a sector historically dominated by retail traders. By acting as a primary counterparty, Galaxy can store risk and facilitate larger transactions while providing greater discretion than trading on an exchange.
Earlier today, Polymarket completed its first block trade in a transaction between crypto broker FalconX and trading technology startup Anera Labs.
Industry observers say the entry of companies such as Galaxy could help increase liquidity and improve pricing efficiency in prediction markets by attracting professional investors to the sector. 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 major challenge for the sector.
This launch further expands Galaxy’s growing derivatives and trading business. The New York-based company, which provides institutional digital asset trading, asset management, staking and tokenization services, is increasingly positioning itself as a bridge between traditional financial markets and emerging digital asset infrastructures.
