BitGo and Susquehanna Crypto provide institutional over-the-counter access to prediction markets.

New collaboration enables hedge funds and other large investors to trade event contracts using cryptocurrency collateral stored on BitGo’s platform.

BitGo, Susquehanna Crypto provide Institutional OTC access to prediction markets. (Pixabay)

Key points:

• BitGo and Susquehanna Crypto have introduced over-the-counter access to prediction markets for institutional clientele.
• Trades can be secured with cryptocurrency or stablecoins held in custody, eliminating the need for asset liquidation.
• This initiative aims to fill infrastructure gaps that have hindered institutional engagement.

BitGo Prime (BTGO) and Susquehanna Crypto announced their collaboration to offer institutional clients over-the-counter (OTC) access to prediction market trades, utilizing digital assets maintained on BitGo’s platform as collateral.

The initiative focuses on hedge funds, family offices, and affluent investors, enabling them to engage in event-driven contracts without depending on retail platforms or converting cryptocurrency holdings into cash, according to a press release from the companies on Tuesday.

Susquehanna Crypto will supply liquidity, with transactions executed bilaterally via BitGo’s OTC desk. The firms stated that trades will adhere to standard derivatives documentation frameworks. Over-the-counter desks are primarily used by investors to trade large or intricate positions without disturbing the market or revealing their strategies.

This structure is akin to how institutions currently trade traditional derivatives, where assets remain in custody and positions are collateralized rather than fully funded in advance. In contrast, most prediction market activities today occur on retail platforms that necessitate pre-funding and provide limited integration with institutional custody systems.

Institutional investors are progressively utilizing prediction markets as a hedging mechanism, taking positions on event outcomes, including elections, policy decisions, or macroeconomic changes, to mitigate risks in their larger portfolios. By pricing specific, real-world events, these markets offer a means to hedge against tail risks that are challenging to capture with conventional instruments such as equities, rates, or options.

Prediction markets have experienced rapid expansion, with trading volumes reaching approximately $40 billion–$45 billion in 2025, a significant increase year over year as retail engagement surged and platforms like Polymarket and Kalshi gained popularity.

Simultaneously, institutional interest has started to grow, with hedge funds and banks increasingly employing these markets for price discovery related to political and economic events, even as infrastructure and regulatory uncertainties continue to restrict broader adoption.

Regulatory fragmentation has also impeded adoption. In the United States, platforms like Kalshi function under the oversight of the Commodity Futures Trading Commission, whereas others, such as Polymarket, operate offshore, limiting access for domestic institutional capital. This has led many firms to seek alternative structures that align better with existing compliance frameworks.

The companies indicated that the new offering aims to address these gaps by merging custody, collateral management, and OTC execution into a unified workflow. By enabling investors to trade against cryptocurrency collateral without transferring assets off-platform, the model seeks to align prediction markets with the infrastructure already utilized by institutions in other asset classes.

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