Galaxy Digital Launches Institutional OTC Prediction Markets Desk, Closes $10M CLARITY Act Trade
Image Credit: Galaxy
Key Takeaways
- Galaxy Digital launched an OTC prediction markets desk for institutional investors, covering non-sports contracts on Kalshi and Polymarket with plans to expand to additional venues.
- The firm completed a $10 million trade with hedge fund Arca tied to the legislative outcome of the CLARITY Act, with Arca’s CIO citing liquidity constraints on existing platforms as the reason for needing Galaxy’s bilateral OTC framework.
- On the same day, Polymarket completed its first block trade between FalconX and Anera Labs, signaling broader institutional momentum in prediction markets.
Galaxy Digital said Tuesday it had launched an over-the-counter prediction markets trading service for institutional investors and completed a $10 million trade with crypto-focused hedge fund Arca tied to the outcome of the proposed CLARITY Act. Galaxy described the launch as positioning it among the first major digital asset firms to offer institutional-scale access to event-driven markets through a bilateral trading framework. Shares of the Nasdaq-listed company were down 6% on Tuesday.
New Desk Covers Non-Sports Contracts on Kalshi and Polymarket With Plans to Expand to Additional Venues
The new service is offered through Galaxy’s global markets trading desk and is designed to give hedge funds, family offices, and other institutional investors access to contracts tied to political, economic, and geopolitical events at liquidity levels and trade sizes that are typically unavailable on retail-focused prediction market platforms.
Galaxy said the offering initially covers non-sports event contracts listed on Kalshi and Polymarket, with plans to add additional venues over time. The firm will also allow clients to pair prediction market positions with hedges in equities, commodities, and other asset classes, according to the company. By acting as a principal counterparty, Galaxy said it can facilitate larger trades and offer clients more discretion than retail-focused prediction market platforms provide.
“Event-driven markets are becoming core to how sophisticated investors express macro views, and they deserve institutional infrastructure to match,” Jason Urban, Galaxy’s global co-head of digital assets, said in a statement.
Arca’s CIO Said Liquidity Constraints on Existing Platforms Blocked the Fund From Participating Directly
The $10 million trade completed as part of the launch was tied to the legislative outcome of the CLARITY Act, a bill that would establish a regulatory framework for digital assets in the United States.
Arca’s chief investment officer, Jeff Dorman, said that prediction markets represented an effective instrument for the fund to hedge its exposure to ongoing crypto regulatory negotiations in Washington, but that the liquidity available on existing platforms made direct participation impractical for an investor of Arca’s size. Galaxy’s OTC framework provided the bilateral structure needed to execute the trade at the required scale.
Polymarket Completes First Block Trade on the Same Day as Galaxy’s Launch
On the same day, Polymarket completed what the company described as its first block trade, a separate transaction between crypto broker FalconX and trading technology startup Anera Labs. Galaxy said the new prediction markets desk is an extension of its existing derivatives and trading business. Kalshi and Polymarket have expanded their contract offerings to cover elections, central bank decisions, and regulatory developments.
