According to Bloomberg, Mike Novogratz’s Galaxy Digital is preparing to become a liquidity provider for Kalshi and Polymarket, two of the biggest names in the fast-expanding world of crypto-based prediction markets.
These platforms let people place simple bets on real-world outcomes; like election results, sports scores, or even policy decisions. Now, Galaxy Digital is looking to plug directly into those bets by offering constant trade activity that keeps the wheels turning.
Mike said the company is already “doing some small-scale experimenting with market-making on prediction markets,” and added that “you’ll eventually see us providing broader liquidity.”
This would make Galaxy Digital a key player in a market that’s already seeing tons of involvement from retail traders and financial firms alike. And while Mike has spent years building Galaxy as a crypto infrastructure backbone for institutions, prediction markets open a new front in that strategy, one that’s raw, fast, and not yet fully regulated.
Kalshi and Polymarket compete for bigger trade flows
Unlike traditional sportsbooks, where the house always takes the opposite side, platforms like Kalshi and Polymarket match people directly. If you want to buy “yes” on a bet, someone else needs to sell you a “no.”
This system needs liquidity providers to keep trades flowing, especially when demand surges. That’s why Kalshi and Polymarket rolled out incentive programs to reward active traders in specific markets.
For years, these platforms were too small to attract serious Wall Street players. The only big name who jumped in early was Susquehanna International Group, which has publicly acknowledged its role on Kalshi.
But the tides are turning. Jump Trading has begun market-making activity on Kalshi, according to Bloomberg, and Cliff Asness, co-founder of AQR Capital Management, said he’s thinking about moving into the sports betting arena.
Kalshi also uses its own in-house desk called Kalshi Trading to keep trades moving and says this desk works separately and doesn’t get any private information.
Not long ago, Kalshi gained a legal opening under the Trump administration, which softened federal attitudes toward event-based trading.
That said, the backlash is real. Melinda Roth, a law professor at Washington & Lee University, said, “This is a mess for so many reasons. We have people taking money they often don’t have and not investing in the stock market or retirement savings.”
She’s been researching the legal gray zone around these kinds of contracts and says the risks are getting harder to ignore.
Trump family ties deepen as Polymarket reenters U.S.
Earlier this year, Kalshi started offering markets tied to sports results just after winning a legal case to allow election betting. State gambling regulators came out against this move, arguing that it broke local laws.
Kalshi pushed back, saying it offers financial products under federal CFTC oversight, not state gambling rules. The company stressed that it operates as a marketplace, not a bookmaker. So far, the Commodity Futures Trading Commission hasn’t stepped in.
Meanwhile, the Trump family is doubling down. Donald Trump Jr. joined both Kalshi and Polymarket as an advisor.
In the fall, Trump Media & Technology Group started talks with Crypto.com, one of Kalshi’s competitors, and ended up launching its own prediction exchange, Truth Predict.
Devin Nunes, CEO of Trump Media and a longtime adviser to President Donald Trump, played a central role in sealing that deal, which reportedly came together in just weeks.
Polymarket, which had been shut out of the U.S. after a 2022 settlement with the CFTC, is now back in the game.
In July, both the CFTC and the Justice Department said they were done investigating the company. That greenlight let Polymarket buy QCX, a tiny derivatives exchange trying to get regulatory approval.
The deal cost $112 million and gave Polymarket a legal way to operate in the U.S. under federal rules. With that door now open, and Galaxy Digital ready to step in, the race to dominate prediction-market liquidity is getting very real, very fast.
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