BitGo Prime (BTGO) and Susquehanna Crypto said they are entering into a partnership to provide institutional clients with over-the-counter (OTC) access to predictable market trades using digital assets on BitGo’s platform as collateral.
The offering is aimed at hedge funds, family offices and high-net-worth investors, allowing them to trade in event-driven contracts without relying on retail platforms or converting crypto holdings into cash, the companies said in a press release on 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 revealing 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 upfront funding and offer limited integration with institutional custody systems.
Institutional investors are increasingly using prediction markets as a hedging tool, betting on event outcomes, such as elections, political decisions or macroeconomic changes, 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 stocks, rates or options.
The prediction markets have seen rapid growth, with trading volume peaking at around $40-45 billion by 2025, multiple times year-over-year as retail participation increased and platforms such as Polymarket and Kalshi gained prominence.
At the same time, institutional interest has begun to build, with hedge funds and banks increasingly using these markets to price-find around political and economic events, although infrastructure and regulatory uncertainty continue to limit wider use.
Regulatory fragmentation has also slowed adoption. In the US, platforms such as Kalshi operate under the supervision of the Commodity Futures Trading Commission, while others, such as Polymarket, remain offshore, limiting access for domestic institutional capital. This has pushed many companies to explore alternative structures that better align with existing compliance frameworks.
The firms said the new offering is designed to address these gaps by combining custody, collateral and OTC execution into a single workflow. By allowing investors to trade against cryptocurrencies without moving assets off the platform, the model aims to bring the prediction markets closer to the infrastructure institutions already use in other asset classes.
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