- Galaxy Digital begins market-making experiments with Polymarket and Kalshi prediction platforms targeting $9B industry.
- Firm joins elite group including Susquehanna and Jump Trading, providing institutional liquidity to event markets.
Mike Novogratz’s Galaxy Digital is making tactical changes to the fast-growing prediction markets sector to grab a portion of the $9 billion industry opportunity. The firm, which is primarily into crypto investments, is in talks with the top platforms Polymarket and Kalshi for liquidity provision, thus signaling the arrival of a new trend of the Wall Street to event-based trading.
Strategic Liquidity Expansion Plans
Galaxy Digital started small-scale market-making trials on prediction market platforms and is willing to increase the volume of operations depending on the results of the tests. Continuous bid-ask spreads will be made available by the company, thus improving market depth and trading efficiency for users of both exchanges.
Novogratz also acknowledged the firm’s hesitating but daring strategy, expressing that they plan to provide wider liquidity services after the experiments show profitable results. Thus, Galaxy is now one of a few institutional players that are entering the space, along with Susquehanna International Group and Jump Trading.
The timing coincides with Galaxy’s May 2024 Nasdaq listing under the ticker GLXY, which is a move that deepens its integration into the conventional U.S. capital markets. By executing this strategic move, the company is effectively combining its expertise in the crypto world with the day-to-day operations of the traditional financial industry, thus paving the way for services like cutting-edge market making.
Prediction markets enable their users to trade binary contracts that are dependent on the results of real-world events, thus establishing price discovery mechanisms for virtually any kind of event, be it elections or sports. Polymarket and Kalshi are the two major players in the field with a total lifetime trading volume of $42.4 billion between them, although the top position has been changing from one platform to another over the last few months.
Though Polymarket was the main source of political event speculation during the election cycle, Kalshi has been more active on a monthly basis since September. Both platforms are looking for professional market makers by offering them incentive programs to keep the liquidity at a normal level for retail and institutional traders.
Recent changes in the industry have been leading the way towards a wider acceptance of the concept by the general public, as can be seen from the fact that Intercontinental Exchange has made a major investment which values Polymarket at around $9 billion after the new financing round. Furthermore, the collaborations with Google Finance and the National Hockey League are indicating the disappearance of the boundaries between the use of the product in the field of politics forecasting only.
The announcement of “Truth Predict” made by Trump Media in association with Crypto.com, in turn, serves as a further confirmation of the prediction markets’ viability as a commentary source for the political arena and as a sector for the event speculation. Galaxy Digital’s decision to come on board is a clear indication of a gradual rise of institutional trust in this new class of assets.
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Source: https://thenewscrypto.com/galaxy-digital-targets-9b-prediction-market-with-new-partners/