Home / News
Galaxy Digital Launches Prediction Market OTC Desk, Executes $10M Bet
• Galaxy Digital has launched an OTC derivatives desk to offer institutional investors access to prediction markets.
• The desk's first major trade was a $10 million event swap with hedge fund Arca betting on a 2025 crypto bill.
• The trade uses bilateral contracts similar to those common on prediction markets like Kalshi.
• The move aims to bring prediction market exposure to large investors via regulated, OTC derivatives.
Galaxy Digital, the prominent cryptocurrency financial services conglomerate, has formally launched a specialized over-the-counter (OTC) derivatives desk designed to provide large-scale investors with direct exposure to prediction markets. The new offering translates the concept of event-based betting—common on public platforms—into bespoke, bilateral derivatives contracts, a structure familiar in traditional markets for interest rates and commodities.
The initiative, operated through Galaxy’s swap dealer division, Galaxy Derivatives, has already seen significant activity. Company executives confirmed that in May, the desk entered into a $10 million "event swap" with crypto hedge fund Arca. This high-stakes derivative contract hinges on the outcome of the Digital Asset Market Clarity Act of 2025, specifically whether the legislation will pass through the U.S. Congress. This transaction exemplifies the desk's function: creating regulated, OTC versions of prediction market contracts for institutional clients.
This strategic launch represents a concerted effort to bridge the growing realm of event prediction with the sophisticated needs of institutional capital. By offering these swaps OTC, Galaxy provides a private, tailored, and potentially more scalable avenue for investors to hedge risks or speculate on geopolitical, regulatory, and macroeconomic events, beyond the limits of public prediction platforms. The $10 million bet with Arca serves as a proof of concept for this new asset class within the structured derivatives landscape.
The move underscores Galaxy Digital’s expansion beyond core crypto asset trading into adjacent innovative financial products. It signals a maturation of prediction markets, as major financial institutions begin to formalize and institutionalize access to them. This development could pave the way for increased liquidity and broader adoption of event-based derivatives as a tool for financial analysis and risk management among professional investors.