Galaxy begins market-making trials in $9B prediction trading platforms

TLDR

Table of Contents

Galaxy Digital is testing liquidity provision on Polymarket and Kalshi
CEO Mike Novogratz confirms small-scale market-making has begun
The $9B prediction market is gaining institutional attention
Jump Trading and SIG are also active on Kalshi

Galaxy Digital is taking early steps into the growing $9 billion prediction market industry. The firm, led by CEO Mike Novogratz, has started small-scale market-making experiments and is in active talks with Polymarket and Kalshi to provide liquidity. As institutional interest in event-driven trading grows, Galaxy aims to expand its presence if initial testing proves successful, positioning itself alongside other major players entering the space.

Galaxy Begins Testing Liquidity Provision

Galaxy Digital is taking early steps toward becoming a liquidity provider in the fast-growing prediction market sector. CEO Mike Novogratz confirmed that the firm has already launched small-scale market-making efforts on Polymarket and Kalshi.

“We’re doing some small-scale experimenting with market-making on prediction markets,” Novogratz told Bloomberg. He added that the company expects to expand its role if the initial data supports growth.

Galaxy’s goal is to supply consistent bids and offers in these markets. This would help narrow spreads and improve depth for traders using both platforms.

Polymarket and Kalshi See Rising Institutional Interest

Both Polymarket and Kalshi have seen increased activity and institutional engagement. The two platforms currently lead the sector with a combined $42.4 billion in all-time trading volume.

Polymarket gained early attention for its focus on political-event trading. However, Kalshi has led in recent monthly trading volume since September.

Kalshi recently attracted interest from Jump Trading, which has begun making markets in a low-profile capacity. Susquehanna International Group is also known to operate on the platform, making Galaxy one of the few new institutional players to join.

Prediction Markets Draw High-Profile Backing

The prediction market space has seen increasing support from traditional finance. Intercontinental Exchange invested in Polymarket in a deal valuing the platform at around $9 billion. This indicates rising confidence in prediction markets as a financial tool.

Meanwhile, Kalshi and Polymarket have formed partnerships with firms like Google Finance and the NHL. These relationships aim to bring more visibility and liquidity to their ecosystems.

Both platforms also offer incentive programs to attract and retain professional market makers. This ensures liquidity is available even in periods of lower retail activity.

Galaxy Expands Capital Market Strategy

Galaxy Digital’s move into prediction markets aligns with its broader strategy of expanding its presence in U.S. capital markets. In May, the firm completed its listing on Nasdaq under the ticker GLXY.

The firm is now looking to grow its reach in emerging asset classes. The prediction market is one such space, with Galaxy viewing it as a potential new source of trading activity and liquidity generation.

While early experiments are still limited in scope, Galaxy is monitoring results closely. If performance meets expectations, the firm plans to increase its market-making presence on both platforms.