Galaxy Digital's OTC desk executed a $10M block trade on Kalshi with Arca, opening institutional access to event contracts. The Clarity Act vote in June will test the model.
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Galaxy Digital opened over-the-counter prediction market trading for institutional clients. The first trade was a $10 million block on Kalshi with Arca as the counterparty. This is the first time a major crypto financial services firm has offered OTC execution for event contracts. The move bridges a gap between retail-style exchange trading and the block-size needs of asset managers and hedge funds.
The $10 million trade tested a structure that bypasses Kalshi’s public order book. Galaxy Digital’s trading desk dealt directly with Arca. The specific event contract was not disclosed. The execution method matters more than the bet. Institutional traders have largely avoided prediction markets because of liquidity fragmentation, shallow order books, and the risk of slippage on larger positions. OTC execution solves that by letting a desk source the other side without broadcasting intentions to the market.
Arca is an asset manager focused on crypto and tokenized assets. Galaxy Digital’s OTC desk sourced the trade through Kalshi’s infrastructure, acting as the intermediary. The trade size – $10 million – is small by traditional OTC standards. It is significant for prediction markets, where total open interest across all contracts remains a fraction of spot or derivatives markets.
The structure has a clear chain of impact. Galaxy Digital takes the execution risk, priced into the spread. The client gets a guaranteed fill at a negotiated price. Kalshi gets institutional flow without needing to deepen its own order book for every contract. For event contracts tied to regulation, elections, or economic data, that OTC bridge could pull in hedge funds and family offices that previously saw the venue as too thin.
The Clarity Act, which faces a decisive vote in June, is the regulatory catalyst that makes this timing sensible. The Act would codify the legal status of event contracts, reducing the compliance uncertainty that has kept most institutional money on the sidelines. Galaxy Digital’s launch is effectively a positioning move. If the Act passes, the OTC pipeline is already live. If it stalls, the desk still earns spread revenue from early adopters.
The mechanism matters here. Prediction markets offer exposure to binary outcomes – yes/no on a bill, a rate decision, a election result. For an institutional portfolio, these contracts can serve as hedges against event risk that options or credit default swaps do not cover cleanly. The problem has always been execution. An OTC desk can bundle multiple contracts, negotiate terms, and clear the trade without hitting a public order book. That is what Galaxy Digital is selling: not the contracts themselves, the access.
The immediate test is whether the $10 million Arca trade leads to repeat volume. Galaxy Digital needs a pipeline of institutional clients who trust the desk’s pricing and counterparty risk. Arca is a known name in crypto asset management, which gives the product a reference client. The next trade might come from a family office looking to hedge the Clarity Act vote itself.
If Galaxy Digital can execute a second trade – bigger or covering a different event – the model gains credibility. The risk is that prediction market OTC stays a niche service, serving only clients with specific event exposure, and fails to scale beyond the first few trades. The confirming signal would be a third-party desk, such as a prime broker or an agency-only broker, launching a similar service.
For traders building a watchlist, the relevant date is June 2025, when the Clarity Act vote creates a binary event that will test the whole prediction market infrastructure. Galaxy Digital’s OTC desk is now live for that moment. The Arca trade is the proof of concept. The Clarity Act will be the trial.
Related coverage: CLARITY Act Faces Decisive June, Backers Warn Of Years-Long Delay and crypto market analysis for broader institutional adoption.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.