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Financial institutions are increasingly entering the prediction markets space, and Galaxy Digital Inc. (Nasdaq: GLXY) is the latest to make a move. The New York-based digital asset firm announced June 2 the launch of institutional over-the-counter (OTC) prediction markets trading through its Global Markets trading desk.
The offering enables hedge funds, family offices, and other institutional clients to access prediction market liquidity at sizes and with a level of discretion not available through retail interfaces. It is designed to allow clients to express macro and thematic views through event-based contracts while combining those positions with hedges across traditional asset classes, including equities and commodities, as reported by PR NewswireHedgeweek.
The offering covers instruments referencing non-sports event contracts traded on Kalshi and Polymarket — spanning economic, political, geopolitical, and other event-driven markets — with plans to expand to additional platforms.
Firm opens with $10M CLARITY Act position on Kalshi
Galaxy also executed a $10 million trade with crypto-native hedge fund Arca at launch, taking a position tied to the passage of the CLARITY Act on Kalshi.
Formally known as the Digital Asset Market Clarity Act, the bipartisan legislation aims to establish clear regulatory responsibilities and oversight jurisdiction between the SEC and CFTC over crypto and digital assets.
The bill passed the House with 294 votes and has since cleared the Senate Banking Committee. However, the Senate Banking Committee draft must still be reconciled and merged with the Senate Agriculture Committee version before a full Senate vote. Any Senate-approved bill must then be reconciled with the House version before final passage, according to an article by CoinDesk.
Jeff Dorman, chief investment officer at Arca, commented on the firm’s inaugural trade with Galaxy:
“Arca is currently investing in themes closely related to the negotiations in Washington over CLARITY. Hedging via prediction markets on CLARITY is one of the most appropriate vehicles currently, but prediction markets are currently not a sophisticated institutional market with enough liquidity for a fund of our size. By utilizing the OTC market with Galaxy, we were able to execute a trade that best suits our fund strategy.”
Galaxy focuses on macro and policy contracts
A key differentiator for Galaxy’s new platform is its focus on non-sports event contracts. Clients may only purchase contracts tied to economic, political, geopolitical, and similar event-driven markets, though Galaxy has indicated plans to expand its contract offerings over time.
In a PR Newswire press release, Jason Urban, Galaxy’s global co-head of digital assets, framed prediction contracts as a tool for institutional investors to sharpen their macro positioning:
“Event-driven markets are becoming core to how sophisticated investors express macro views, and they deserve institutional infrastructure to match. We’re giving clients a principal counterparty that can warehouse risk, build hedged strategies across asset classes, and execute at sizes and scale that actually matter to their overall portfolios.”
Galaxy’s entry reflects broader momentum in the space. Institutional access to prediction markets is expanding, with broker-dealer-style desks now enabling hedge funds and other large investors to trade event-driven contracts at scale through regulated and regulated-adjacent venues.
Polymarket completed its first block trade the same week Galaxy’s desk went live, and a new venture capital firm, 5c(c) Capital, recently launched to invest in prediction markets infrastructure, aiming to raise to $35 million and back roughly 20 early-stage startups over two years.
