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Galaxy Digital said Tuesday it has launched an over-the-counter prediction-markets trading desk for institutional clients, with the new service already producing a $10 million block trade with crypto-focused hedge fund Arca tied to the outcome of the proposed CLARITY Act. The Nasdaq-listed digital asset firm is positioning itself as a principal counterparty on event contracts listed on Kalshi and Polymarket, offering hedge funds and family offices trade sizes and bilateral execution that retail platforms cannot match. Shares of Galaxy (GLXY) were down roughly 6% on Tuesday in line with the broader crypto equities tape.
The new desk sits inside Galaxy's global markets trading business and initially covers non-sports event contracts across the two largest prediction venues, with plans to expand to additional platforms. Clients will be able to pair prediction-market positions with hedges across equities, commodities and other asset classes to build broader event-driven strategies, the firm said — a structure that turns prediction contracts from stand-alone bets into building blocks for macro books.
Why it matters
Prediction markets have grown rapidly over the past two years as platforms like Kalshi and Polymarket signed up millions of retail users trading on elections, central-bank decisions and regulatory outcomes. Liquidity, however, has been a bottleneck for any investor trying to express a directional view at institutional size. Galaxy's entry — and Polymarket's first block trade earlier Tuesday between FalconX and Anera Labs — points to the next phase of the sector: the build-out of OTC plumbing that lets large allocators enter and exit without moving the on-platform order book. That infrastructure is what historically separated crypto markets from the rest of capital markets, and prediction venues are now moving down the same path.
Galaxy already runs institutional digital asset trading, asset management, staking and tokenization businesses out of New York. Adding a prediction-markets desk extends the firm from spot and derivatives into a new asset class that increasingly correlates with the macro events crypto investors already trade around.
Frequently asked questions
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What did Galaxy Digital actually launch?
An over-the-counter prediction-markets trading desk for institutional clients, run out of Galaxy's global markets trading business and initially covering non-sports event contracts listed on Kalshi and Polymarket.
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What is the $10M Arca trade tied to?
The outcome of the proposed CLARITY Act, federal legislation that would establish a US regulatory framework for digital assets. Arca CIO Jeff Dorman framed the position as a way to hedge the fund's exposure to ongoing Washington negotiations on crypto regulation.
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Why is Galaxy acting as a principal counterparty?
By warehousing risk itself, Galaxy can facilitate block-sized trades and offer bilateral execution that retail-focused prediction platforms cannot match. That intermediation is the product — it lets large allocators enter and exit without moving the on-platform order book.
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How does this fit Galaxy's broader business?
It extends Galaxy's existing institutional digital asset trading, asset management, staking and tokenization businesses into a new asset class. Galaxy now spans spot, derivatives and event-driven contracts aimed at the same institutional client base.
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What is the main risk to the new desk?
Regulatory uncertainty. Event-contract trading remains under active CFTC and state-level scrutiny, and Galaxy's principal-counterparty model assumes clients willing to hold exposure across legislative and political cycles that resolve slowly and unevenly.
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