Galaxy Digital Explores Liquidity Provision in Prediction Markets
Mike Novogratz's Galaxy Digital is venturing into prediction markets, engaging in discussions with Polymarket and Kalshi Inc. to provide liquidity. This move positions Galaxy as one of the first major crypto firms to enter this niche, traditionally dominated by specialized trading shops.
The firm has begun small-scale experiments with market-making in prediction markets, a strategic shift from its usual focus on institutional crypto investors. Liquidity provision—posting constant buy and sell orders—is critical to stabilizing these markets, where price volatility and illiquidity often deter participation.
Regulatory ambiguity looms over prediction markets in the U.S., with some states classifying them as gambling. The Commodity Futures Trading Commission (CFTC) oversees event contracts, adding another LAYER of complexity to Galaxy's foray.
