What to know : BitGo and Susquehanna Crypto have launched over-the-counter access to prediction markets for institutional clients. Trades can be collateralized with crypto or stablecoins held in custody, avoiding asset liquidation. The move aims to address infrastructure gaps that have limited institutional participation.
BitGo Prime (BTGO) and Susquehanna Crypto said they are partnering to provide institutional clients with over-the-counter (OTC) access to prediction market trades, using digital assets held on BitGo’s platform as collateral.
The offering targets hedge funds, family offices and high-net-worth investors, allowing them to transact in event-driven contracts without relying on retail platforms or converting crypto holdings into cash, the companies said in a press release Tuesday.
Liquidity will be provided by Susquehanna Crypto, with trades executed bilaterally through BitGo’s OTC desk. The firms said transactions will follow standard derivatives documentation frameworks. Investors use over-the-counter desks mainly to trade large or complex positions without disrupting the market or exposing their strategy.
The structure mirrors how institutions already trade traditional derivatives, where assets remain in custody and positions are collateralized rather than fully funded upfront. In contrast, most prediction market activity today takes place on retail platforms that require pre-funding and offer limited integration with institutional custody systems.
Institutional investors are increasingly using prediction markets as a hedging tool, taking positions on event outcomes, such as elections, policy decisions or macroeconomic shifts, to offset risks in their broader portfolios. By pricing discrete, real-world events, these markets offer a way to hedge tail risks that are difficult to capture with traditional instruments such as equities, rates, or options.
Prediction markets have seen rapid growth, with trading volumes topping roughly $40 billion–$45 billion in 2025, up several-fold year over year as retail participation surged and platforms like Polymarket and Kalshi gained traction.
At the same time, institutional interest has begun to build, with hedge funds and banks increasingly using these markets for price discovery around political and economic events, even as infrastructure and regulatory uncertainty continue to limit broader adoption.
Regulatory fragmentation has also slowed adoption. In the U.S., platforms like Kalshi operate under Commodity Futures Trading Commission oversight, while others, such as Polymarket, remain offshore, limiting access for domestic institutional capital. That has pushed many firms to explore alternative structures that better align with existing compliance frameworks.
The companies said the new offering is designed to address those gaps by combining custody, collateral management and OTC execution into a single workflow. By allowing investors to trade against crypto collateral without moving assets off-platform, the model aims to bring prediction markets closer to the infrastructure institutions already use in other asset classes.
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