Galaxy Opens Institutional OTC Prediction Desk; $10M Kalshi Trade

Galaxy Digital announced on Tuesday that it has opened an institutional over-the-counter prediction-market trading desk and executed a $10 million bilateral contract on Kalshi with hedge fund Arca tied to passage of the Clarity Act. Galaxy acted as the principal counterparty and took the opposite side of the position on its own balance sheet to enable the trade.

The desk provides hedge funds, family offices and other large investors access to event-driven contracts in sizes and with discretion not available on retail platforms. Galaxy noted the initial offering covers non-sports contracts on Kalshi and Polymarket across economic, political and geopolitical markets, and the firm plans to add further platforms.

Galaxy structured the $10 million Kalshi trade on a bilateral basis so Arca could build institutional-scale exposure. Arca's chief investment officer Jeff Dorman described prediction markets as the appropriate hedging vehicle for the firm's Washington-focused positions and noted that retail liquidity was insufficient for a fund of its size.

The desk can pair prediction-market positions with hedges in equities and commodities, allowing clients to manage risk around a single event instead of handling separate exposures across asset classes. The firm provides bilateral executions, settlement options and customizable collateral arrangements intended for institutional size, confidentiality and operational needs.

Jason Urban, Galaxy's global co-head of digital assets, wrote in the announcement: “Event-driven markets are becoming core to how sophisticated investors express macro views, and they deserve institutional infrastructure to match.”

The launch comes amid growing institutional interest in prediction markets. Trading firms, custodians and market makers have expanded infrastructure and struck market-making and partnership agreements to support larger flows and to offer institutional OTC access with crypto and stablecoin collateral.

Prediction markets let participants buy contracts that pay out based on the outcome of a specific event. Investors use them to hedge political and economic risks or to express directional macro views. Kalshi and Polymarket are among the main venues where these event contracts trade.