How Is BitGo Bringing Prediction Markets to Institutional Clients?
Crypto custodian BitGo is expanding its institutional offering to include over-the-counter access to prediction markets through a partnership with Susquehanna Crypto, the digital asset unit of the global quantitative trading firm. The service will be integrated into BitGo Prime, allowing clients to trade event-based contracts directly through the platform.
The offering is designed for hedge funds, family offices and ultra-high-net-worth individuals seeking exposure to prediction markets without relying on retail-focused platforms. By embedding execution, custody and collateral management within a single interface, BitGo is positioning the product as a more structured entry point for institutional participants.
Traders will be able to access bilateral liquidity provided by Susquehanna Crypto, enabling larger trades to be executed off-exchange. The service targets transactions of $100,000 or more, reflecting a focus on block-sized institutional flow rather than retail activity.
What Role Does Crypto Collateral Play in This Model?
A key feature of the offering is the ability for clients to post stablecoins, bitcoin and other crypto assets as collateral. This structure allows participants to engage in prediction markets without liquidating existing digital asset holdings, preserving exposure while deploying capital into event-driven trades.
The collateral model aligns with broader trends in institutional crypto markets, where firms increasingly seek capital efficiency across trading strategies. By avoiding forced conversion into fiat, clients can maintain balance sheet flexibility while accessing new sources of return.
This approach also reflects the growing role of stablecoins in institutional trading infrastructure. Their use as collateral simplifies settlement and reduces friction in cross-platform activity, particularly in markets that operate outside traditional exchange frameworks.
Investor Takeaway
Why Are Prediction Markets Gaining Institutional Attention?
Prediction markets, which allow traders to take positions on the outcome of future events, have seen sustained growth in trading volumes since mid-2025. Platforms such as Kalshi and Polymarket have expanded their reach through partnerships with major sports, media and entertainment organizations, broadening their user base and increasing liquidity.
Institutional interest has historically been limited by fragmented infrastructure, particularly around custody, execution and collateral management. BitGo’s integrated approach aims to address these gaps by combining these functions into a single service tailored to larger market participants.
“Prediction markets have matured into a genuine institutional asset class,” said Chase Lax, CEO at Susquehanna Crypto. “We’ve long believed in their power as a tool for price discovery around real-world events. Partnering with BitGo to give institutional clients access to these markets is a natural extension of the work we’ve been doing in this space.”
Market makers such as Susquehanna play a central role in this ecosystem by providing continuous two-way pricing on binary contracts. Their presence supports liquidity, tighter spreads and more efficient entry and exit for large trades.
Investor Takeaway
What Regulatory and Market Risks Remain?
Despite growing adoption, prediction markets continue to face regulatory uncertainty, particularly in the United States. The Commodity Futures Trading Commission has asserted jurisdiction over event contracts under the Commodity Exchange Act, while several states argue that such platforms may conflict with local gaming and gambling laws.
This fragmented regulatory landscape introduces risk for institutional participants, especially those operating across multiple jurisdictions. While federal oversight may provide a framework for compliance, state-level challenges could affect market access and product availability.
At the same time, the involvement of established trading firms and custodians signals increasing confidence in the sector’s long-term viability. As infrastructure matures and regulatory clarity improves, prediction markets may become a more consistent component of institutional trading strategies, particularly for event-driven and macro-focused portfolios.
