Galaxy Digital is in advanced talks with both Kalshi and Polymarket about stepping in as a liquidity provider. These discussions, according to Bloomberg, signal growing institutional momentum in on-chain and regulated event trading, aiming to address the persistent challenges of thin order books and volatile spreads in this rapidly expanding sector.
Prediction Market Growth and Institutional Interest
In the past year, prediction markets have become an important type of platform for speculating on real-world outcomes, including elections, economic data, policy changes, and sports.
Both Kalshi and Polymarket operate peer-to-peer platforms where users trade binary “yes/no” shares on questions like “Will inflation fall below 3% next quarter?” Unlike traditional sportsbooks, every trade requires a counterparty, a model that makes deep, reliable liquidity essential for healthy, transparent price discovery.
Kalshi, recently valued at $11 billion after a major fundraising round, has expanded its contract selection following court and Commodity Futures Trading Commission (CFTC) approvals, now allowing U.S. participants to trade election-based and economic markets.
Polymarket, after clearing regulatory hurdles via its acquisition of QCEX, is relaunching access for U.S. retail and institutional users and recently set record clearing volumes during the last U.S. election cycle, well ahead of major sportsbooks.
Galaxy Digital Pursues Market-Making Ambitions
Galaxy Digital’s strategy under CEO Mike Novogratz is to bring top-tier market-making to these venues, posting continuous bids and offers to keep pricing tight and support higher trading volumes.
Novogratz described the company’s approach as “small-scale experiments” at first, but expects this to scale up with demand and as trading conditions mature. Other major trading firms, including Jump Trading and Susquehanna International Group, have taken early steps in this space, indicating Wall Street’s embrace of event-driven, crypto-powered trading venues.
The entry of firms like Galaxy Digital is designed to give prediction market users, both retail and institutional, access to improved order execution, more consistent liquidity, and a wider range of contract options. With major players now moving in, these platforms are likely to see lower user costs, higher max bets, and new forms of listed event contracts.
