Galaxy enters institutional prediction markets with $10 million Arca trade
The digital asset firm launched OTC prediction markets trading for institutions and completed a $10 million trade tied to U.S. crypto legislation with hedge fund Arca.
Galaxy enters institutional prediction markets with $10 million Arca trade
The digital asset firm launched OTC prediction markets trading for institutions and completed a $10 million trade tied to U.S. crypto legislation with hedge fund Arca.
Jason Urban of Galaxy Digital (left) (Daniel Murray/Consensus)
What to know:
Galaxy Digital has launched an over-the-counter prediction markets trading service for institutional investors, offering large-scale access to event-driven contracts tied to political, economic and geopolitical outcomes.
The new desk will initially focus on non-sports contracts listed on Kalshi and Polymarket and lets clients pair these positions with hedges across equities, commodities and other asset classes to build broader event-driven strategies, the company said.
By acting as a principal counterparty and facilitating large trades such as a $10 million CLARITY Act wager with hedge fund Arca, Galaxy aims to deepen liquidity, attract professional investors and further institutionalize prediction markets despite ongoing regulatory uncertainty.
Shares of the company are down 6% on Tuesday, in line with the broader crypto stock market.
The launch comes as prediction markets have gained traction among investors seeking ways to express views on real-world events ranging from elections and central bank decisions to regulatory developments. Platforms such as Kalshi and Polymarket have experienced rapid growth over the past two years, with many crypto-native companies entering the market.
Galaxy said its offering initially covers non-sports event contracts traded on Kalshi and Polymarket, with plans to expand to additional venues. The firm will also allow clients to combine prediction market positions with hedges across equities, commodities and other asset classes, creating broader event-driven investment strategies.
As part of the launch, Galaxy facilitated a $10 million trade with crypto-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 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.
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 surrounding crypto regulation, but that 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 that has historically been dominated by retail traders. By acting as a principal counterparty, Galaxy can warehouse risk and facilitate larger transactions while providing greater discretion than exchange-based trading.
Earlier today, Polymarket completed its first block trade in a transaction between crypto broker FalconX and trading tech startup Anera Labs.
Industry observers say the entrance of firms such as Galaxy could help deepen liquidity and improve pricing efficiency in prediction markets by bringing professional investors into the space. Supporters argue that greater institutional participation could make market prices more useful as indicators of future outcomes, while critics caution that regulatory uncertainty remains a key challenge for the sector.
The launch further expands Galaxy’s growing derivatives and trading business. The New York-based firm, which provides 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.
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
The Bitmine chairman said DeFi and AI could push the Ethereum network’s value into the multi-trillion range, making current prices “future optionality at a discount”.
What to know:
Tom Lee, head of research at Fundstrat and chairman of Bitmine, told a Paris conference he believes Ethereum could eventually reach $250,000 as AI and tokenization drive a major shift in financial infrastructure.
Bitmine recently bought 111,942 ether, lifting its holdings to nearly 5.4 million ETH, or about 4.47% of…
