Galaxy Digital moves into institutional prediction markets, backs $10M Arca trade
Galaxy Digital (Nasdaq: GLXY) has launched over-the-counter (OTC) prediction market trading aimed at institutional investors, the firm announced Tuesday — becoming one of the first major digital-asset banks to offer large-scale, bilateral access to event-driven contracts.
The service, run through Galaxy’s global markets trading desk, lets hedge funds, family offices and other institutions take positions on political, economic and geopolitical outcomes with trade sizes and liquidity that retail-focused platforms typically can’t accommodate. Galaxy said the offering initially covers non-sports event contracts traded on Kalshi and Polymarket, with plans to add more venues.
As part of the rollout, Galaxy facilitated a $10 million transaction with crypto-focused hedge fund Arca tied to the outcome of the proposed CLARITY Act — U.S. legislation that would create a regulatory framework for digital assets. The trade illustrates how institutional players can use prediction markets to hedge exposure to policy and regulatory risk.
“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, added that prediction markets provide an effective hedge for ongoing Washington negotiations on crypto regulation, but that liquidity constraints on public platforms have limited big investors’ direct participation.
Galaxy will act as principal counterparty in these transactions, warehousing risk and enabling larger, more discreet trades. The firm also said clients will be able to combine prediction-market positions with hedges across equities, commodities and other asset classes to build broader event-driven strategies.
The move comes amid growing interest in prediction markets as tools for expressing views on elections, central-bank decisions, regulatory outcomes and other real-world events. Platforms such as Kalshi and Polymarket have seen rapid growth, and earlier Tuesday Polymarket announced its first block trade between crypto broker FalconX and trading tech startup Anera Labs.
Industry observers say institutional entrants like Galaxy could deepen liquidity and improve price discovery in prediction markets by bringing professional capital and trading infrastructure into the space. Supporters argue this will make market-implied probabilities more informative; critics warn regulatory uncertainty remains a material obstacle.
Galaxy’s push further expands its derivatives and trading business as the New York-based firm — which provides institutional trading, asset management, staking and tokenization services — continues to position itself as a bridge between traditional finance and digital-asset infrastructure. Shares of Galaxy were down about 6% on Tuesday, roughly in line with the broader crypto stock market.
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