Galaxy Digital CEO Mike Novogratz confirmed talks. The firm plans to provide liquidity in prediction markets, expanding market-making experiments.
Galaxy Digital CEO Mike Novogratz has confirmed that it is in discussion with prediction markets. The firm is in contact with Polymarket and Kalshi. According to Bloomberg, they want to offer liquidity in prediction markets. They have even already started small-scale market-making experiments. Plans are in place to expand such efforts.
Galaxy Digital Explores Market-Making in Growing Prediction Sector
Jump Trading has also quietly begun making markets on Kalshi. This represents growing institutional interest. Mike Novogratz’s Galaxy Digital Inc. is in talks. This includes Polymarket and Kalshi Inc. They are thinking of becoming a liquidity provider in their platforms. Prediction markets are still used to capture retail demand. They also are of interest on Wall Street.
Galaxy Digital has traditionally focused on offering crypto infrastructure. This goes after the institutional players. These would now act as a market maker on the exchanges. This is providing regular trades. These would greatly increase the liquidity of the platforms. This was confirmed in an interview by Novogratz.
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Prediction markets have been rapidly increasing in recent months. They offer binary contracts. These are tied to certain outcomes. Examples include elections, sports results and key economic events. Traders buy “yes” or “no” shares. These are particular questions. The prices are based on the implied probability of the crowd. This is an indication that a given outcome will occur.
The regulatory landscape is patchy, nevertheless. Some US states contends that prediction markets are covered by gambling laws. However, at the Federal level, the Commodity Futures Trading Commission. This is responsible for overseeing event contracts. It has so far not intervened. It has not closed platforms down. These include Polymarket and Kalshi.
Unlike traditional sportsbooks, these platforms are different. Sportsbooks take the opposite of customer bets. Polymarket and Kalshi operate mostly in a peer-to-peer order book. To buy – “yes” on a market, it is needed. This person must be willing to have the corresponding “no” position. This brings liquidity providers to center stage.
Institutional Involvement Signals Maturing Crypto Market
By offering to be a market-maker, Galaxy would post regular bids and offers. This aims to deepen trading. This would make it easier for bigger trades to move. They would be passed through the order book. This would happen without causing significant price volatility.
Galaxy has already begun small-scale market-making experiments. They intend to continue their efforts.
Details of the initiative point to the motivation. Prediction markets are speculative outlets. They are also used as polling tools. Some have seen growing interest. This is particularly the case from retail traders. Liquidity from institutional players such as Galaxy would help to mature the sector.
Mechanics of these markets are obvious. Prediction markets such as Polymarket and Kalshi tend to use peer-to-peer order books. To operate efficiently, they need liquidity providers. These providers post orders. This is exactly the role that Galaxy Digital wants to play.
Wider context shows a trend. This move is more the expression of the growing institutional involvement. This is in the maturing cryptocurrency market. Their activities indicate an increased adoption. They also signify integration into traditional finance.
The regulatory context of prediction markets is in flux. Some see them as subject to gambling laws. Others ,such as the Commodity Futures Trading Commission, oversee event contracts. This changing framework provides opportunities as well as challenges for the market participants.