Remember when betting on who would win the presidency felt like something you did in a smoky back room or on some sketchy offshore site? Yeah, those days are basically ancient history now.
Last year, over three and a half billion dollars flowed through one single platform alone just to answer the question “Who’s moving into the White House?” And the craziest part? A huge chunk of that money came from people who never touched crypto before. That’s the power of modern prediction markets – and right now, some of the biggest players on Wall Street are lining up to get a piece of the action.
Word just dropped that Galaxy Digital, the crypto powerhouse led by Mike Novogratz, is in serious talks to become an official market maker on both Polymarket and Kalshi. If you’ve been anywhere near crypto Twitter the past eighteen months, you already know this is kind of a big deal.
The Quiet Institutional Rush Into Event Contracts
For years, prediction markets lived on the fringes. Academics loved them because they often outperformed polls and expert forecasts. Degens loved them because, well, gambling with extra steps. But the volumes were tiny and the liquidity was… let’s just say you sometimes waited minutes for a $100 bet to fill.
Then 2024 happened.
Suddenly you had mainstream media citing Polymarket odds instead of Nate Silver. Google started surfacing real-time probabilities in search results. And the money? It poured in like we’ve rarely seen in crypto outside of bull-market manias.
Now the infrastructure is catching up to the demand – and catching up fast.
What Market Making Actually Means Here
In traditional sportsbooks, the house sets the odds and takes the other side of your bet. Prediction markets work differently. They’re peer-to-peer at their core. Every time someone buys “Yes” on an outcome, someone else has to sell “Yes” (which is effectively buying “No”).
When retail interest is lopsided – think everyone piling into one candidate – spreads blow out and prices stall. That’s where professional market makers step in.
They commit capital to quote both sides continuously, tightening spreads and keeping the market functional even during the wildest sentiment swings. In return they earn the spread and often collect rebates from the platform.
Having a deep-pocketed, credible name like Galaxy on the bid and offer changes everything. Retail traders get better pricing. Arbitrageurs can move larger size. And the platform itself becomes dramatically more attractive to the next wave of money.
Galaxy Isn’t Coming Alone
Here’s the part that should make you sit up straight: Galaxy wouldn’t be the first traditional heavyweight to plant a flag.
- Jump Trading is already live on Kalshi, soaking up volume like a sponge.
- Susquehanna has been quietly active for a while.
- AQR’s Cliff Asness publicly floated the idea of expanding into sports betting.
- Kalshi even runs its own internal desk for peak periods.
This isn’t random. These are some of the savviest proprietary trading firms on the planet smelling opportunity.
And Galaxy? They’re not exactly small fry. Fifty billion in assets under management territory. When they move into a new vertical, people notice.
Why 2025 Feels Like the Breakout Year
Look, I’ve been watching crypto long enough to recognize inflection points. And honestly? Everything is lining up.
Prediction markets are basically truth-discovery machines wrapped in financial incentives. Once the regulatory dust settles and liquidity deepens, they become unstoppable.
First, the regulatory picture just got a lot friendlier. Kalshi fought the CFTC in court and won the right to list election contracts. Polymarket scooped up a licensed exchange and settled its regulatory headaches. The path for U.S. users is clearer than it’s been in years.
Second, the money is raising valuations into the stratosphere. Kalshi at eleven billion post-money. Polymarket potentially north of twelve billion on the next round. Those aren’t niche startup numbers – that’s serious unicorn territory.
Third, mainstream distribution just went supernova. Google integrating live odds into search results? That’s the kind of oxygen only a handful of financial products ever receive.
Where the Real Money Will Flow Next
Elections were the gateway drug. The volumes were insane, sure, but they’re also inherently short-lived. What happens when the same infrastructure starts covering:
- Fed rate decisions (already huge on Kalshi)
- Oscars, Grammys, and box-office winners
- NFL, NBA, and March Madness outcomes
- Macro events – recession yes/no, inflation targets
- Even corporate earnings beats
Suddenly you’re not just competing with offshore books or daily fantasy – you’re competing with pieces of the multi-trillion-dollar derivatives complex. And you’re doing it with better pricing, 24/7 markets, and no juice.
I suspect that’s exactly what Galaxy’s risk team is modeling right now.
The Bigger Picture for Crypto
Let’s zoom out for a second.
Crypto started with Bitcoin as digital gold. Then DeFi promised to rebuild finance from the ground up. Most of those experiments either quietly died or consolidated into a handful of winners.
But prediction markets? They might actually deliver on the original cypherpunk dream of censorship-resistant, global, permissionless markets – except this time the use case is so obvious that even your uncle who still uses a flip phone gets it.
When institutions like Galaxy pile in, they bring more than just capital. They bring credibility, regulatory relationships, and the kind of infrastructure that turns toys into tools.
We’re still early, but make no mistake – the game board just tilted.
What Should Traders Watch For
If you actually trade these markets, here’s what I’m keeping my eyes on:
- Tighter spreads on major contracts (sub-1¢ on liquid outcomes would be transformative)
- Depth charts that don’t evaporate the moment CNBC mentions a poll
- New market listings appearing overnight instead of after months of legal review
- Potential integration with traditional prime brokerage stacks
Any one of those would be huge. All of them together? That’s how you build the next meaningful pillar of the crypto economy.
Galaxy Digital stepping up to the plate tells me we’re a lot closer to that reality than most people realize.
The prediction market summer of 2024 was wild. But 2025? That might be when the institutions finally arrive for good.
Sometimes the most revolutionary products aren’t the flashiest ones. They’re the ones that take something humans have done forever – argue about what’s going to happen next – and wrap it in better incentives, better technology, and now, better liquidity.
We’re watching that story write itself in real time. And if the rumors are true, Galaxy Digital just picked up the pen.
