Galaxy Digital has initiated a new over-the-counter prediction markets trading service for institutional players, completing a $10 million transaction linked to U.S. crypto regulations with hedge fund Arca.
By Helene Braun, AI Boost|Edited by Nikhilesh De Jun 2, 2026, 7:17 p.m. 2 min readMake preferred on Jason Urban of Galaxy Digital (left) (Daniel Murray/Consensus)Key Highlights:
- Galaxy Digital has rolled out an OTC prediction markets trading platform for institutional investors, allowing access to event-driven contracts related to political, economic, and geopolitical events.
- The initial focus will be on non-sports contracts available on Kalshi and Polymarket, enabling clients to combine these positions with hedges across different asset classes.
- By acting as a principal counterparty and facilitating significant transactions like the $10 million wager on the CLARITY Act with Arca, Galaxy aims to enhance market liquidity and draw professional investors into the prediction markets sector despite regulatory challenges.
On Tuesday, Galaxy Digital (GLXY) announced the launch of an over-the-counter (OTC) prediction markets trading service for institutional investors, positioning itself as a pioneer in providing extensive access to event-driven markets via bilateral trading arrangements.
The Nasdaq-listed firm stated that this new service, available through its global markets trading desk, enables hedge funds, family offices, and other institutional investors to engage in contracts associated with political, economic, and geopolitical developments while benefiting from liquidity and trade sizes typically not accessible through retail-focused platforms.
The company's shares fell by 6% on Tuesday, mirroring a broader downturn in the cryptocurrency stock market.
This launch comes at a time when prediction markets are increasingly appealing to investors looking to express their opinions on real-world occurrences such as elections and central bank actions. Platforms like Kalshi and Polymarket have seen significant growth over the past two years, with a number of crypto-focused companies entering the arena.
Galaxy indicated that its service will initially encompass non-sports event contracts traded on Kalshi and Polymarket, with plans to broaden its offerings in the future. The company will also facilitate the integration of prediction market positions with hedges across equities, commodities, and other asset types, enabling more comprehensive event-driven investment strategies.
As part of this initiative, Galaxy executed a $10 million trade with Arca, a hedge fund focused on cryptocurrency, related to the proposed CLARITY Act, which aims to establish a regulatory framework for digital assets in the U.S.
“Event-driven markets are becoming central to how sophisticated investors express macro views, and they require institutional-grade infrastructure,” stated Jason Urban, Galaxy's global co-head of digital assets.
Jeff Dorman, Arca’s chief investment officer, remarked that prediction markets provide an effective way to hedge their exposure to the ongoing discussions in Washington regarding crypto regulations, although liquidity issues on existing platforms have posed challenges for large investors.
This development signifies a broader trend towards the institutionalization of prediction markets, which have traditionally been dominated by retail traders. By acting as a principal counterparty, Galaxy can manage risk and facilitate larger transactions while offering more discretion compared to exchange-based trading.
Earlier today, Polymarket executed its first block trade in a deal between crypto broker FalconX and trading technology startup Anera Labs.
Industry analysts suggest that the entry of firms like Galaxy could enhance liquidity and improve pricing efficiency in prediction markets by attracting professional investors. Proponents believe that increased institutional involvement could make market prices more indicative of future outcomes, while detractors warn that regulatory uncertainty remains a significant obstacle for the industry.
This launch further expands Galaxy’s growing derivatives and trading business. The New York-based company, which offers institutional digital asset trading, asset management, staking, and tokenization services, continues to position itself as a bridge between traditional financial markets and the emerging digital asset ecosystem.
Galaxy DigitalPrediction MarketsAI 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.More For You
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