BitGo Prime (BTGO) and Susquehanna Crypto said they are partnering to provide institutional clients over-the-counter (OTC) access to prediction market trading using digital assets held on the BitGo platform as collateral.
The offering targets hedge funds, family offices and high-net-worth investors, allowing them to trade event-driven contracts without relying on a retail platform or converting crypto assets into cash, the companies said in a press release on Tuesday.
Liquidity will be provided by Susquehanna Crypto and bilateral trading will be conducted through BitGo’s OTC desk. The companies said the transaction would follow a standard derivatives documentation framework. Investors use OTC desks primarily to trade large or complex positions without disrupting the market or exposing their strategies.
This structure reflects the way institutions already trade traditional derivatives, where assets remain in custody and positions are collateralized rather than fully funded up front. In contrast, most prediction market activity today occurs on retail platforms, which require upfront financing and have limited integration with institutional custody systems.
Institutional investors are increasingly using prediction markets as a hedging tool, taking positions based on the outcome of events such as elections, policy decisions or macroeconomic changes to offset risks in their broader portfolios. By pricing discrete real-world events, these markets provide a way to hedge tail risk that is difficult to capture with traditional instruments such as equities, interest rates, or options.
With the surge in retail participation and the traction of platforms such as Polymarket and Kalshi, the prediction market is growing rapidly, with transaction volume reaching approximately $40 billion to $45 billion by 2025, a multiple-fold increase year-on-year.
Meanwhile, institutional interest has begun to build, with hedge funds and banks increasingly using these markets for price discovery around political and economic events, although infrastructure and regulatory uncertainty continue to limit wider adoption.
Regulatory fragmentation also slows adoption. In the United States, platforms such as Kalshi operate under the oversight of the Commodity Futures Trading Commission, while others such as Polymarket remain offshore, limiting access to domestic institutional capital. This has prompted many companies to explore alternative structures that are more consistent with existing compliance frameworks.
The new product aims to address these gaps by integrating custody, collateral management and OTC execution into a single workflow, the companies said. By allowing investors to trade crypto collateral without moving assets off the platform, the model aims to bring prediction markets closer to the infrastructure institutions already use in other asset classes.
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