Galaxy has launched an institutional OTC prediction markets offering through its Global Markets desk, aiming to give hedge funds, family offices, and other professional investors access to event-based markets with larger trade sizes and greater discretion, the company announced Tuesday.
Galaxy says the launch reflects growing demand from sophisticated investors who increasingly use event-driven markets to express macro views and manage portfolio risk.
“We’re giving clients a principal counterparty that can warehouse risk, build hedged strategies across asset classes, and execute at sizes and scale that actually matter to their overall portfolios,” Jason Urban, Global Co-Head of Digital Assets at Galaxy, commented on the launch.
The service covers non-sports contracts on Kalshi and Polymarket, including political, economic, and geopolitical events. Galaxy can also combine prediction market positions with hedges in equities, commodities, and other asset classes to create broader risk-management strategies.
At launch, Galaxy facilitated a $10 million trade with crypto hedge fund Arca tied to the outcome of the CLARITY Act. The transaction provided Arca with institutional-scale liquidity and a customized way to hedge regulatory exposure.
“Hedging via prediction markets on CLARITY is one of the most appropriate vehicles currently, but prediction markets are currently not a sophisticated institutional market with enough liquidity for a fund of our size. By utilizing the OTC market with Galaxy, we were able to execute a trade that best suits our fund strategy,” Jeff Dorman, Chief Investment Officer at Arca, said in a statement.
Galaxy currently offers the service exclusively to institutional clients and evaluates participation based on applicable legal and regulatory requirements in each jurisdiction.