Mike Novogratz’s Galaxy Digital Inc. is exploring a deeper move into the fast-growing world of prediction markets. The crypto-focused financial services firm is in discussions to become a liquidity provider on platforms Polymarket and Kalshi Inc., according to comments made by Novogratz and reporting from Bloomberg.
Novogratz stated that Galaxy Digital has already commenced small-scale market-making experiments on prediction platforms and now intends to expand its footprint as demand accelerates among retail traders and traditional financial institutions.
By functioning as a liquidity provider, Galaxy would act as a market maker, placing regular bids and offers. This role aims to tighten spreads and enhance trading depth across the exchanges.
The Rise of Prediction Markets
Prediction markets, which enable users to trade contracts tied to real-world events such as elections, economic indicators, corporate outcomes, or global affairs, have experienced a significant surge in attention over the past two years.
Polymarket, operating on blockchain rails, has gained particular popularity during the U.S. election cycle. It has attracted tens of thousands of new users and seen notable increases in trading volume.
Kalshi, a prediction market regulated by the CFTC, has also broadened its product range to include economic and geopolitical contracts, drawing interest from institutional investors.
Novogratz observed that Wall Street's interest has grown as these platforms demonstrate improved transparency and price discovery during major news cycles.
“Prediction markets are proving their value as real-time sentiment indicators,” he remarked, adding that enhanced liquidity is crucial for supporting the sector’s maturation.
Broader Institutional Interest
Galaxy Digital is not the sole entity eyeing this opportunity. Bloomberg also reports that Jump Trading has quietly begun making markets on Kalshi. This development signals a broader institutional shift toward embracing event-driven trading infrastructure built on crypto-native or hybrid architecture.
For Galaxy, this move aligns with its overarching strategy of providing crypto-market infrastructure and capturing new avenues of institutional engagement.
With prediction markets positioned for continued growth, the entry of major liquidity providers could represent a turning point. This could transform once-niche platforms into more sophisticated, mainstream trading venues.