Unlocking Prediction Markets: BitGo and Susquehanna’s New OTC Access for Institutions!

by

BitGo, Susquehanna Crypto offering institutional OTC access to prediction marketsFinance

What to know:

  • BitGo and Susquehanna Crypto have launched over-the-counter access to prediction markets for institutional clients.
  • Trades can be collateralized with crypto or stablecoins held in custody, avoiding asset liquidation.
  • The move aims to address infrastructure gaps that have limited institutional participation.

As a crypto investor, I’m seeing some interesting moves in institutional access. BitGo Prime and Susquehanna Crypto are teaming up to let big players trade prediction markets directly, using their existing digital assets held with BitGo as collateral. Basically, it’s making it easier for institutions to get involved in prediction markets without having to jump through a lot of hoops.

This new service lets hedge funds, family offices, and wealthy investors trade in contracts based on specific events without needing to use typical retail exchanges or sell their cryptocurrency for cash, according to a statement released Tuesday.

Susquehanna Crypto will ensure there’s enough buying and selling activity, and trades will be handled directly through BitGo. These transactions will use standard legal agreements, similar to those used for other financial products. Investors typically use these direct trading arrangements to execute large or complicated trades privately, avoiding market impact and keeping their investment strategies confidential.

From my perspective as an analyst, the way this system is built is intentionally similar to how established institutions currently handle traditional derivatives. That means assets stay safely held, and positions are secured with collateral, rather than requiring everyone to put up the full amount of money beforehand. This is a key difference from most prediction markets you see today, which are typically aimed at individual users, require upfront funding, and don’t easily connect with the secure custody systems that institutions rely on.

More and more institutional investors are using prediction markets to protect their investments. They’re essentially making predictions on events like elections, policy changes, or economic trends to balance out risks in their overall portfolios. These markets allow investors to hedge against unlikely but potentially damaging events – ‘tail risks’ – which are hard to protect against using typical investments like stocks, bonds, or options.

Prediction markets are growing quickly, with an estimated $40 to $45 billion traded in 2025. This represents a significant increase from previous years, driven by more individual investors joining platforms such as Polymarket and Kalshi.

More and more institutions, like hedge funds and banks, are starting to pay attention to these markets, using them to gauge how political and economic events will affect prices. However, a lack of established infrastructure and clear regulations is still holding back wider use.

Confusing and inconsistent regulations are hindering the growth of these platforms. In the U.S., some, like Kalshi, are regulated by the Commodity Futures Trading Commission, while others, such as Polymarket, operate from outside the country, restricting access for American institutional investors. This has led many companies to seek out new structures that more easily fit within current legal guidelines.

From my analysis, this new offering seems designed to solve some key issues in the prediction markets space. Essentially, it’s bringing together asset custody, collateral management, and over-the-counter trading into one streamlined process. What’s particularly interesting is that it allows investors to trade using their crypto holdings without actually transferring those assets off the platform. This approach aims to make prediction markets more accessible and familiar to institutional investors who are already comfortable with similar infrastructure used for traditional assets.

Read More

2026-03-24 15:37