BitGo, a digital asset trading and custody platform, and Susquehanna Crypto will collaborate to provide institutional clients with over-the-counter access to prediction markets, allowing them to trade event-based contracts using cryptocurrencies or stablecoins held in custody.
According to Tuesday’s announcement, trades will be directed through BitGo’s platform, with liquidity provided by Susquehanna, allowing hedge funds, family offices and other large investors to execute two-sided trades without moving assets off the platform or converting holdings, including Bitcoin or stablecoins, into cash.
Positions are backed by crypto collateral and documented via derivatives-style agreements, with minimum trade sizes starting at $100,000.
Prediction markets allow users to trade contracts tied to the outcome of real-world events, with prices reflecting the implied probability of an outcome in the market. Contracts can cover everything from sporting and geopolitical events to niche outcomes like short-term Bitcoin (BTC) price movements or weather conditions.
While these markets have grown as tools for pricing event-driven risk, institutional participation has remained limited due to gaps in custody, collateral management and execution infrastructure, according to BitGo.
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Prediction markets face growing regulatory pressure in the US
The launch comes as prediction markets face growing legal challenges in the United States, where at least 11 states have taken action against platforms like Kalshi, arguing that they operate as unlicensed gambling venues.
In Nevada, a state court issued a temporary ban on Kalshi on March 20, siding with gaming regulators who said the platform offers unlicensed bets on the outcomes of events. The ruling followed a federal appeals court’s decision Thursday to deny Kalshi’s emergency request to stay the case.
In Arizona, authorities filed criminal charges against entities linked to Kalshi, alleging that he accepted election and sports bets in violation of state law. However, Kalshi co-founder and CEO Tarek Mansour called the charges a “complete overkill,” arguing that his platform’s activity is not related to gambling and accusing the state of trying to circumvent the judicial process.
Elsewhere, policymakers are taking steps to incorporate prediction markets into existing gaming frameworks. In Utah, proposed legislation would classify certain event-based contracts as gambling, while in Pennsylvania, lawmakers are preparing a bill that would place the sector under the state’s gaming regulator, including a 34% tax on revenue.
To be sure, not all efforts against prediction market platforms have been successful. In Tennessee, a federal judge in February blocked a state attempt to halt Kalshi’s operations, ruling that its event contracts are governed by the Commodity Exchange Act and are subject to oversight by the Commodity Futures Trading Commission (CFTC) rather than individual states.
Prediction markets have also faced scrutiny over possible insider trading after several well-timed bets appeared to anticipate major events. In response, Kalshi and Polymarket introduced new restrictions on Monday to limit the use of non-public information and prevent participants with direct influence over results from trading.
At the federal level, authorities are evaluating possible regulatory approaches. On March 12, the CFTC published a prior notice of proposed rulemaking seeking public input on how prediction market contracts should be regulated.
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