Key Highlights
- Galaxy Digital has introduced an over-the-counter prediction markets trading platform specifically designed for institutional clients, positioning itself among the pioneering major digital asset companies in this space.
- The platform’s inaugural transaction involved a $10 million event-based swap with cryptocurrency hedge fund Arca, based on the passage of the CLARITY Act prior to 2027.
- Operating under Galaxy’s Global Markets division, the trading desk facilitates transactions for clients across Kalshi and Polymarket platforms.
- While prediction markets processed more than $60 billion in trading volume throughout 2026, substantial orders continue to create price impact on publicly accessible order books.
- Galaxy’s analytical team estimates a 75% probability for CLARITY Act passage, exceeding the 50% to 73% probability range currently reflected on Kalshi and Polymarket.
Galaxy Digital has entered the institutional prediction markets sector by establishing an over-the-counter trading platform designed to enable hedge funds and family offices to execute sizable positions on political and economic events that exceed the capacity of public platforms.
Platform Operations and Structure
The new trading desk operates as part of Galaxy’s Global Markets division, concentrating on non-sports event contracts available on Kalshi and Polymarket.
Galaxy functions as the principal counterparty in these transactions, providing direct price quotes while assuming risk on its internal books. This structure enables the firm to execute substantial trades without creating disruptions in public order books.
Institutional clients gain access to combined positions that integrate prediction market contracts with hedging instruments in equities and commodities. This approach provides investors with comprehensive, event-driven strategies centered on political and regulatory developments.
According to the company, prediction markets processed over $60 billion in trading volume during 2026. However, liquidity constraints persist for large-scale transactions. An order worth $10 million on current platforms could trigger price movements before execution completes.
Inaugural Transaction Details: CLARITY Act Swap
The platform’s first executed trade was a $10 million event swap agreement with cryptocurrency hedge fund Arca.
The contract centers on the Digital Asset Market Clarity Act, legislation designed to establish a comprehensive regulatory structure for digital assets across the United States. The swap terms specify that Arca receives payment from Galaxy if the legislation gains enactment before 2027. Galaxy receives payment from Arca should the bill fail to pass.
Jeff Dorman, serving as Arca’s chief investment officer, characterized prediction markets as presently among the most effective instruments for hedging against exposure to Washington’s evolving regulatory landscape. He noted that Arca’s transaction size created challenges for direct platform participation due to insufficient liquidity.
Galaxy’s research division currently projects a 75% likelihood of CLARITY Act passage. The Senate Banking Committee moved the legislation forward with a 15-9 vote on May 14. Galaxy projects a potential signing timeframe around the week beginning August 3.
Traders on Kalshi and Polymarket have valued the identical outcome within a 50% to 73% probability range throughout the previous month.
Jason Urban, Galaxy’s global co-head of digital assets, noted that event-driven markets are emerging as critical instruments for sophisticated investors articulating macroeconomic perspectives, and the new desk provides clients access to a counterparty capable of handling block-sized transactions.
Rapid Market Expansion
Combined monthly trading volume across Kalshi and Polymarket expanded from below $5 billion in September 2025 to approximately $24 billion by April 2026.
Kalshi recently disclosed that its annualized institutional volume increased 800% across a six-month period, reaching $178 billion. The platform secured $1 billion in funding at a $22 billion valuation last month.
Intercontinental Exchange, which owns the New York Stock Exchange, is supporting Polymarket with $2 billion in capital.
Additional trading firms have joined the sector. Jump Trading and Wintermute initiated formal operations earlier this year. Polymarket also recently finalized its first block trade through a transaction involving broker FalconX and trading technology startup Anera Labs.
Galaxy shares declined 6% on Tuesday, tracking movements across the broader cryptocurrency equity market.
