Galaxy Digital Expands Institutional Access to Prediction Markets with New OTC Trading Service

Galaxy Digital (NASDAQ: GLXY) has introduced a new over-the-counter (OTC) prediction markets trading service designed specifically for institutional investors, marking a significant step in the growing institutional adoption of event-based trading markets.

The digital asset and financial services firm announced on Tuesday that its global markets trading desk will now offer institutional clients access to prediction market contracts linked to political, economic, and geopolitical events. The service targets hedge funds, family offices, and other professional investors seeking larger trade sizes and deeper liquidity than what is typically available on retail-focused prediction market platforms.

The launch comes as prediction markets continue to gain popularity among investors looking to capitalize on outcomes related to elections, monetary policy decisions, regulatory developments, and other major real-world events. Leading platforms such as Polymarket and Kalshi have experienced rapid expansion, attracting increased interest from both retail and institutional participants.

Initially, Galaxy Digital’s OTC offering will support non-sports event contracts available through Kalshi and Polymarket. The company also plans to broaden coverage to additional venues in the future. A key feature of the service is the ability for investors to integrate prediction market positions with hedging strategies involving equities, commodities, and other financial instruments, creating more sophisticated event-driven investment opportunities.

As part of the rollout, Galaxy facilitated a $10 million transaction with crypto-focused hedge fund Arca. The trade was tied to the proposed CLARITY Act, a U.S. legislative initiative aimed at establishing a clearer regulatory framework for digital assets.

According to Galaxy executives, event-driven investing is becoming increasingly important for institutional investors seeking efficient ways to express macroeconomic and policy-related views. Arca noted that prediction markets provide valuable hedging opportunities, but limited liquidity on existing platforms has often restricted participation by larger investors.

Industry analysts believe Galaxy’s entry into the sector could improve market liquidity and price discovery by attracting professional capital. However, regulatory uncertainty remains a key concern for the broader prediction markets industry.

The new service further strengthens Galaxy Digital’s expanding trading and derivatives business, reinforcing its role as a bridge between traditional finance and the rapidly evolving digital asset ecosystem.