Galaxy Digital opens OTC desk with $10M prediction trade

Galaxy Digital has launched an over-the-counter trading desk for prediction markets, providing institutional investors with a new channel to take large-scale positions on political, economic, and geopolitical events. The service, operated through the firm's Global Markets unit, debuted with a $10 million transaction tied to the passage of a major U.S. cryptocurrency bill.

The inaugural trade was an event swap executed with crypto hedge fund Arca, focusing on the Digital Asset Market Clarity Act. Under the terms, Arca will pay Galaxy if the legislation becomes law before 2027, while Galaxy will pay Arca if it does not. The desk facilitates trades on contracts listed on prediction market platforms Kalshi and Polymarket, but acts as a principal counterparty, quoting prices directly and holding the risk on its own book. This structure allows Galaxy to handle block-sized trades that could otherwise disrupt pricing on public order books due to limited liquidity.

Jeff Dorman, Arca's chief investment officer, stated that prediction markets are currently one of the most suitable tools to hedge exposure to the ongoing regulatory debate in Washington. He noted that the existing market...