Galaxy, the Nasdaq-listed digital assets firm with a $12 billion market cap, launched an institutional over-the-counter prediction-markets desk on Tuesday. The desk’s first trade was a $10 million event swap on Kalshi, letting crypto hedge fund Arca take a position on whether the Digital Asset (CLARITY Act) becomes law.
What the desk does
Until now, institutions that wanted event-based exposure mostly had to wade into retail-oriented prediction-market platforms or negotiate bespoke bilateral deals. Galaxy’s new desk offers OTC execution—meaning a direct, negotiated contract between two parties—priced and settled through Kalshi’s infrastructure. The desk is aimed at firms that face compliance hurdles, need block-trade sizes, or prefer not to show their hand on a public order book.
The CLARITY Act bet
The inaugural deal is a swap tied to the CLARITY Act, a bill that would create a federal regulatory framework for digital assets. By writing a swap with Arca, Galaxy essentially provided a custom instrument: Arca gains a payout if the legislation passes by a defined date, or loses its premium if it doesn’t. The size—$10 million—is far larger than typical retail prediction-market positions. Neither Galaxy nor Arca commented on the specific strike terms, but the trade signals growing institutional interest in using event contracts to hedge or speculate on policy outcomes.
Prediction markets have long been a retail hobbyhorse—think Trump vs. Biden contracts on Polymarket. Bringing OTC execution to the category could open the door for asset managers, family offices, and even corporate treasuries to use event swaps as risk-management tools. Galaxy already runs a large OTC desk for digital-asset spot and derivatives; the prediction-markets extension is a natural fit. The firm’s Nasdaq listing and $12 billion market cap give it the balance-sheet credibility that hedge funds and allocators demand from a counterparty.
The timing also tracks a broader push to legitimize event contracts in the U.S. Kalshi is a CFTC-regulated exchange, and the CLARITY Act—if passed—would itself reshape the crypto regulatory landscape. Galaxy is effectively slicing off a piece of that binary outcome for a sophisticated client.
The desk is live and trading. Galaxy hasn't announced which additional event contracts it plans to offer, but the infrastructure is built to handle swaps on anything Kalshi lists—elections, Fed rate decisions, crypto regulation. For now, the $10 million bet on the CLARITY Act sits as the proof of concept.
