Galaxy Digital launches institutional OTC prediction market trading with $10M Kalshi trade

Galaxy Digital has launched an institutional over-the-counter prediction-market trading desk, giving hedge funds, family offices, and other large investors access to event-driven contracts in sizes and with a level of discretion unavailable through retail interfaces. The firm 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, according to a Tuesday announcement. Galaxy's OTC desk acted as principal counterparty, enabling Arca to build the position on a bilateral basis at institutional scale.

"Event-driven markets are becoming core to how sophisticated investors express macro views, and they deserve institutional infrastructure to match," said Jason Urban, global co-head of digital assets at Galaxy.

Arca chief investment officer Jeff Dorman said prediction markets were the most appropriate hedging vehicle for the firm's Washington-focused positions, but that existing retail liquidity was insufficient for a fund of its size. Dorman, ever the optimist, apparently believes the solution to illiquid retail venues is a $10 million institutional block trade.

The offering covers non-sports event contracts on Kalshi and Polymarket, spanning economic, political, and geopolitical markets with plans to expand to additional platforms. Galaxy can also pair prediction market positions with hedges in equities and commodities, allowing clients to build unified risk strategies around a single event rather than managing exposure separately across asset classes — a tidy bit of portfolio plumbing for anyone who enjoys bundling their bets.

Prediction market expansion has been a slow grind rather than a sudden flood. Wintermute extended its trading infrastructure into event contracts last week, The Block reported. BitGo moved earlier in March, partnering with Susquehanna Crypto to offer institutional OTC access with crypto and stablecoin collateral. Jump Trading also struck market-making deals with both Polymarket and Kalshi in exchange for equity stakes in February. Galaxy had been exploring the space since at least November and was reportedly in talks to serve as a liquidity provider for both Polymarket and Kalshi.

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