Galaxy Digital plans to provide market-making services for prediction market giants Polymarket and Kalshi, and has launched a small-scale trial.

Galaxy Digital is exploring opportunities to provide liquidity for the prediction market platforms Polymarket and Kalshi. This digital asset investment firm led by Mike Novogratz has begun small-scale market-making trials on these platforms.

In an interview with Bloomberg, Novogratz stated that Galaxy Digital plans to offer a broader range of liquidity services in the future. The company hopes to become a fixed counterparty for these two platforms, which operate peer-to-peer markets where users can trade binary “yes/no” contracts.

Prediction markets allow users to bet on the outcomes of various events, ranging from politics and sports to economic data. The contract prices reflect the market implied probabilities of specific outcomes. Both platforms require liquidity providers to maintain small spreads, as each “yes” transaction requires someone to make a “no.”

Polymarket and Kalshi have become the leading companies in the field, together accounting for approximately 97% of the global prediction market trading volume, with a total trading volume of about 42.4 billion dollars.

Kalshi recently completed a round of financing of $1 billion, with a valuation of $11 billion. This round of financing was led by Sequoia Capital and CapitalG. Polymarket is preparing for a new round of financing, with the company's valuation possibly between $12 billion and $15 billion.

It is worth mentioning that during the 2024 US election cycle, the prediction market sector attracted widespread attention. At that time, Polymarket handled over $3.5 billion in election-related transaction volume, surpassing the trading volume of major sports betting companies during the same period. (CoinCentral)