Galaxy Digital explores Polymarket, Kalshi partnerships as liquidity provider: Bloomberg

Mike Novogratz-led Galaxy Digital is in discussions to provide liquidity for prediction market platforms Polymarket and Kalshi, Bloomberg reported Monday.

Novogratz told Bloomberg in an interview that Galaxy Digital is currently doing "small-scale experimenting" with market-making on prediction markets, adding that the firm has future plans to provide "broader liquidity" on those platforms.

The move signifies digital asset investment management firm Galaxy Digital's expansion into the burgeoning prediction market sector, which is increasingly being recognized as a new frontier combining information and finance.

Prediction markets let users trade simple yes or no contracts, with contract prices reflecting the market-implied probability of a given outcome. Polymarket and Kalshi are the two dominant players in the field, having seen around $42.4 billion in cumulative volume.

While decentralization-focused Polymarket initially led the market after it gained traction around U.S. election results, CFTC-regulated Kalshi has overtaken it in monthly volume since September.

The two platforms have recently secured high-profile partners through both solitary and collaborative agreements. Galaxy Digital, Google Finance and the U.S. National Hockey League chose to partner with both platforms.

Analysts at Bernstein wrote in a note to clients earlier this month that prediction markets are "evolving to be broader information markets," with demand now spreading well beyond politics and sports into economics, culture, corporate activity, and financial indicators.

Meanwhile, other major players in crypto and finance are also looking to enter the space with their own platforms, with Gemini and CME Group recently announcing such plans respectively.